United Parcel Service Inc. ( UPS) was trading weaker Wednesday morning after rival FedEx Corp. ( FDX) sets profit guidance below expectations Tuesday night. The charts of the two shippers are quite different, so let's take a few minutes to check out UPS.
In this daily bar chart of UPS, below, we can see a possible base pattern the past 12 months. We have a low in December and a retest or second bottom in late May. Prices broke out above the April highs in July and retested the breakout in August. UPS is above the rising 50-day moving average line and the rising 200-day line. A bullish golden cross of these two popular moving averages can be seen in early August.
The On-Balance-Volume (OBV) line moved up with the price action in late July and recently made a new high to confirm the new price highs in September. In the bottom panel is a small bearish divergence as the 12-day momentum study made a lower high from July to September despite prices making a higher high.
In this weekly bar chart of UPS, below, the base pattern of the daily chart looks less impressive. Prices are above the rising 40-week moving average line, but we see the $125 level and then the $130-$135 area as small pockets of resistance. The weekly OBV line shows a stair-step rise from early 2018 and the MACD oscillator on this longer time frame is very bullish.
In this Point and Figure chart of UPS, below, we can see the recent upside breakout at $121.25 and the potential upside price target of $145.77.
Bottom line strategy: UPS may be under some selling pressure here on Wednesday because of the results from FDX, but the difference in charts suggests UPS will go its own way higher.
