Our websites use cookies to offer you a better browsing experience by enabling, optimising, and analysing site operations, as well as to provide personalised ad content and allow you to connect to social media. By choosing “Accept all” you consent to the use of cookies and the related processing of personal data. Select “Manage consent” to manage your consent preferences. You can change your preferences or retract your consent at any time via the cookie policy page. Please view our cookie policy and our privacy policy.
UBS Group has during its strong uptrend since July performed two Gaps. Normally there are three gaps during a strong bullish trend: Break-away, Continuation and Exhaustion gap. An Exhaustion gap is a gap higher before the trend exhausts and trend reverses. We are missing one. Could we see an Exhaustion gap when UBS report Earnings later this week?
Both Volume and RSI are indicating weakening of the trend with divergence as illustrated by the falling dashed lines. The high close 28th August did not correspond to a higher RSI value and Volume has been steadily declining since the Break away gap. (Divergence – where price is moving higher but indicator values are declining - indicates an imbalance of the trend – it is simply getting weaker. It is not a top and reversal signal but a warning sign of a trend is likely to exhaust)
However, a new higher close in UBS could cancel the divergence. If instead market gets disappointed sending UBS to close the 2nd gap i.e., closing below 21.32 it could be hit with a larger sell-off/correction that could take the share price down to test the upper level in the Break away gap at 20.
Weekly chart is showing RSI divergence but a price gap higher could cancel just that. It would need a weekly RSI close above the horizontal dashed line. If we do not see UBS closing below the 2nd gap but instead is moving higher, the bullish trend could continue a few weeks more to the 1.382 projection at 23.32, possibly to the 1.618 projection at 24.85
Monthly chart. UBS is close to its strong resistance at around 22.25-22.55. A close above could pave the way for higher levels towards 32-32 longer-term. Resistance at around 25.75 A rejection could initiate a correction as mentioned above
The Saxo Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.
None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo or its affiliates.
X
Your browser cannot display this website correctly.
Our website is optimised to be browsed by a system running iOS 9.X and on desktop IE 10 or newer. If you are using an older system or browser, the website may look strange. To improve your experience on our site, please update your browser or system.