United Parcel Service Is Testing Key Support

A look at the charts of UPS.

The charts of United Parcel Service (UPS) got our attention Friday morning. The shares have been stalled in a sideways trading range since early August and dips into the $160 ot $155 area have found buying. Despite this support under the market the charts have weakened.

In this daily bar chart of UPS, below, we can see a weakening picture. Prices are now trading below the declining 50-day moving average line. The 200-day moving average line is still rising and intersects around $140.

The trading volume has been neutral for months and the On-Balance-Volume (OBV) line has been drifting slightly lower since August. The Moving Average Convergence Divergence (MACD) oscillator has been weak since the middle of August and has moved below the zero line this month for an outright sell signal.

 

In the weekly bar chart of UPS, below, we can see a less than robust picture. The shares are still above the rising 40-week moving average line but prices have traded sideways for five months.

 

The OBV line has been moving sideways and the MACD oscillator is pointed down.  

 

 

In this Point and Figure chart of UPS, below, we can see that the software is projecting a potential downside price target of $141. This chart does not show much in the way of support around $141 so further declines are possible. 

 

 

 

Bottom-line strategy: UPS is looking tired here and traders should avoid the long side.

(UPS is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells UPS? Learn more now.)

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