We looked at the charts and indicators of United Parcel Service, Inc. (UPS) a month ago, noting that "UPS is poised to move higher in the short-run. It has not made a big base the past three months but it can support further gains. Aggressive traders could go long UPS around $115 but they need to risk below $110. A rally back to the $125 to $130 area is possible."
Looking over the charts this afternoon we can see that prices have inched higher but the rally seems to be running out of steam.
In the updated daily bar chart of UPS, below, we can see that prices have been holding above the mostly flat 200-day line. The 50-day moving average line is rising. The level of volume looks like it has diminished from May to June suggesting a lack of sponsorship.
The daily On-Balance-Volume (OBV) line has move sideways to lower the past four weeks. The 12-day price momentum study has slowed from late April to now giving us a bearish divergence when compared to the higher price highs.
In this weekly bar chart of UPS, below, we can see the prices are just above the flat 40-week moving average line. The weekly OBV line has stalled the past six weeks and the Moving Average Convergence Divergence (MACD) oscillator has moved back to the zero line but has begun to narrow.
In this Point and Figure chart of UPS, below, we can still see an upside price target of $126 but also that a decline back to $113.10 or lower could mark a reversal on this chart.
Bottom line: UPS did recover from its late March lows but it looks like the bounce has run out of steam with momentum weakening and volume decreasing. Longs should consider raising sell stop protection to $113.