An Interesting Time for UPS to Develop a Possible Bearish Formation
Parcel delivery company United Parcel Service (NYSE: UPS) is currently in one of its busiest times of the year. During the holiday season, the company sees a big boost to package traffic due to the increase in sales from retailers and individuals shipping packages to their loved ones. To give you an idea of how much business increases, I looked back at 2017’s quarterly results. The company’s revenue jumped by 17.8% in the fourth quarter of 2017 compared to the third quarter.
While the revenue boost is interesting, that isn’t what caught my eye. Looking at the daily chart of UPS, we could be seeing a head and shoulders pattern forming and that would be a bearish sign for the stock.
We see that the stock topped out around the $117.50 area in June and then dipped down to the $103.50 level in July. This could be the left shoulder and the left side of the neck. The stock then rallied up to the $124 area in September before dipping back down to the $103.50 area in late October. Over the past month the stock has rallied back up to the $117.50 area.
The stock could still break through this area, but is interesting that it stalled there yesterday when the market was making such a strong move. The stock gapped up 1.15% on the open, but then fell throughout the day and ended up taking a small loss on the day.
The next day or two will give us a better idea of whether the stock is more likely to drop back down to complete the head and shoulders pattern or break above the resistance at the $117.50 area.
UPS's Stochastic Oscillator is remaining in oversold zone for 3 days
The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an uptrend is expected.
Technical Analysis (Indicators)
Bullish Trend Analysis
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where UPS advanced for three days, in of 319 cases, the price rose further within the following month. The odds of a continued upward trend are .
UPS may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Aroon Indicator entered an Uptrend today. In of 213 cases where UPS Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on April 12, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on UPS as a result. In of 92 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for UPS turned negative on March 26, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 50 similar instances when the indicator turned negative. In of the 50 cases the stock turned lower in the days that followed. This puts the odds of success at .
UPS moved below its 50-day moving average on April 12, 2024 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for UPS crossed bearishly below the 50-day moving average on April 15, 2024. This indicates that the trend has shifted lower and could be considered a sell signal. In of 18 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where UPS declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 77, placing this stock slightly better than average.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (7.278) is normal, around the industry mean (19.997). P/E Ratio (18.926) is within average values for comparable stocks, (23.454). Projected Growth (PEG Ratio) (1.752) is also within normal values, averaging (10.503). Dividend Yield (0.044) settles around the average of (0.037) among similar stocks. P/S Ratio (1.396) is also within normal values, averaging (1.265).
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating fairly steady price growth. UPS’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
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General Information
a provider of global package delivery and supply chain management solutions
Industry AirFreightCouriers