Could Be Trucking Toward a Buy

 | May 29, 2013 | 9:30 AM EDT  | Comments
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Stock quotes in this article:

ups

When a stock is in an uptrend, I like the enter it in the direction of that trend when I see symmetrical pullbacks. UPS (UPS) is a stock in a solid uptrend, and so far we have seen a pullback that's symmetrical both in price and when considering timing. Let's take a look at the daily chart to define the setup.

As far as price is concerned, I'm stalking a wider price zone from $85.02 to $86.34. This zone includes mostly 100% projections of prior corrective declines within the larger uptrend. The zone also overlaps some key retracements of the most recent swings up.

UPS (UPS) -- Daily
Source: Dynamic Trader

As far as timing is concerned, I am looking at a cluster of time cycles that UPS is approaching, as illustrated by the pink histogram on this chart. Besides that histogram, I have illustrated what I call time symmetry. That is, the decline into the April 18 low lasted 13 trading days, exactly the same as the decline into the May 28 low -- which is testing key support.

When both time and price parameters come together in a trade setup, it increases the odds for it to play out. There is one caveat: The odds are only high if you see the official buy trigger that tells you it is worth placing a bet against the setup.

If the price holds above this key zone, the initial upside target comes in around the $90.94 area, though the area may be adjusted depending on where the actual low is made. However, if the $85.02 area is violated by a decent margin, I will consider myself wrong.

Let's see if time and price can come together for a buy in UPS.

For more information on trades and triggers, please refer here.

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