Don't Ignore This Chart

A Global Logistics Player Hits Resistance

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United Parcel Service (UPS) is a global player in logistics and package delivery. The outlook for the global economy is surely dimming with the Shanghai Composite ($SSEC) falling all year, the German DAX Index ($DAX) and French CAC Index ($CAC) hitting new lows, and the S&P 500 turning south over the last two months.

Even though the stock has yet to hit a 52-week low, the long-term trend is down. The chart below shows UPS with a lower high from January to early September. The stock peaked a few weeks before the S&P 500 and broke its summer lows in late October. UPS broke the 200-day SMA in the process and the 50-day EMA moved below the 200-day EMA last week (PPO(50,200,0) turned negative).

Short-term, the stock bounced back to the last support break and the falling 200-day SMA in mid November. Broken support turns resistance and this could mark a turning point. Notice that a rising wedge formed with support set in the 106-108 area. A break below this zone would signal a continuation lower and target a test of the March low.  


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- Arthur Hill, CMT

Senior Technical Analyst, StockCharts.com

Book: Define the Trend and Trade the Trend
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Arthur Hill
About the author: , CMT, is a Senior Technical Analyst at StockCharts.com. He has written articles for numerous financial publications including Barrons and Stocks & Commodities magazine. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed technician. In addition to his CMT designation, Arthur holds an MBA from the Cass Business School at City University in London. Learn More
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