We may be shipping more and more items that we just ordered online, but the chart of Trifecta Stocks holding United Parcel Service (UPS) is looking like it wants to head lower despite the increased demand. Remember that markets are forward looking.
Looking at this chart of UPS, above, I think the picture and indicators are neutral at best. UPS has been trading back and forth, above and below the 50-day and 200-day moving averages, all year. The 200-day average is flat. Looking a little closer at the rally in September and October, we can see volume and the On-Balance-Volume (OBV) line did not expand or trend up with the price action. The end result of this rally, without an expansion in volume, is that it was finished by the end of October. The Moving Average Convergence Divergence (MACD) oscillator, a trend-following tool, is bearish and below the zero line. We haven't closed for the day, but it looks like today's action could turn out to be a big up-to-down reversal day.
This longer-term weekly vertical bar chart of UPS, above, is troubling. In the upper panel we have prices. First take note of the $95 level and how many times UPS has bounced off that area; $95 is key long-term support. UPS is below the flat 40-week moving average. The OBV line is neutral and not foreshadowing an upside breakout. The MACD oscillator is not showing any strength as it has been hovering around the zero line. Traders and investors should recognize that a weekly close below $95 would be bearish and $85 could be the first stop in anticipated downtrend.
