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2Q 2023 is a good quarter for dividends.
My war chest has begun filling up last month.
This is just in time too.
In recent blogs and videos I produced, I kept reminding myself that I would only be nibbling at UOB if its stock price fell to $28.
This is based on what I saw in the chart.
Immediate support is at around $28 a share.
If I were to be more exact, based on the weekly chart, it is at $27.80 a share which was the low formed on the 5th of June last year.
It also looked like the beginning of a neckline of a double bottom in the weekly chart.
In less than two weeks, the price of UOB's common stock has fallen from $30.15 to $28.22 a share.
That is a pretty big decline of almost 6.5%.
If I didn't have any exposure to UOB yet and if I have been waiting to get in, I would do so now.
However, I wouldn't go all in.
Fundamentally, at $27.80 to $28 a share, we would be paying around a 14% premium to the bank's book value and getting a dividend yield of around 4.8% at these prices.
Not too shabby.
I already have a significant investment in UOB but I would probably be nibbling too.
Nibbling and not gobbling.
I wouldn't go all in because bearish sentiments could be pervasive and this could drive the stock price lower to the next support at $26.90 to $27 a share.
Buying at these lower prices would mean paying a lower 10% premium to the bank's book value and also getting a higher 5% dividend yield.
If that support is ever tested, I would be buying much more then.
Technical analysis is about probabilities and never about certainty.
It tells us where the support and resistance levels are but it doesn't tell us if they would be tested or if they would hold.
This is my own plan and you should have your own plan too.
If AK can do it, so can you!
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