For his second "Executive Decision" segment of Mad Money Tuesday night, Jim Cramer spoke with Carol Tome, CEO of United Parcel Service (UPS) , the shipping giant that just posted a 52-cents-a-share earnings beat after a strong holiday quarter.
Tome said UPS continues to transform its operations and this quarter was able to increase revenue faster than volumes. She said UPS delivered 97% service levels throughout the holiday quarter all while increasing productivity.
Productivity is the name of the game, especially given that demand outstrips supply in the small package business.
When asked how our country is doing with vaccine shipments, Tome gave us a good report card. She said UPS has delivered over 225,000 vaccine shipments with 99.99% accuracy so far. UPS is delivering vaccines from manufacturer to dosing centers in less than 20 hours, all while maintaining the very cold temperatures required.
We looked at UPS on Jan. 15 and wrote that "UPS is looking tired here and traders should avoid the long side."
How do the charts look now?
In the updated daily bar chart of UPS, below, we can see that prices have remained on the defensive trading below the declining 50-day moving average line. The On-Balance-Volume (OBV) line is still pointed down from late December telling us that sellers of the delivery company are more aggressive than the buyers.
The Moving Average Convergence Divergence (MACD) oscillator is still in bearish territory below the zero line.
In the weekly Japanese candlestick chart of UPS, below, we can see upper shadows above $160 the past few weeks. Upper shadows tell us that traders have rejected the highs. The 40-week moving average line is still bullish and intersects around $147 or so.
The weekly OBV line has been neutral the past four months. The MACD oscillator remains pointed down toward the zero line.
In this daily Point and Figure chart of UPS, below, we can see the downside price target of $141.
Bottom-line strategy: The charts of UPS are still weak. A trade at $153 is likely to precipitate further declines. The $141 is our downside price target but there is not much in the way of support in that area.