From the beginning of this year, the UPS Expedited Mail Services stock (NYSE: UPS) had gained around 22%. Even though in the end of May the share price fell into the red for the year, investors saw it as an opportunity to take advantage of the lower price and push it back up, beyond April highs. From June 3rd, the stock is trading above its short-term upwards moving trendline. As long as that line remains intact, we will stay positive and continue examining the upside.
UPS had distanced itself from the above-mentioned upside line. So even if we see a slide back down towards that line again, as long as the price doesn’t fall below it, we will continue aiming for the upside in the near term. But in order to get slightly more comfortable with higher areas, we need to see a break above the stocks' key resistance zone, at 117.90, marked near the highs of August 8th and 13th. This way more buyers could see this move as a good opportunity to jump in and drive the stock towards its next potential resistance area, at 121.20, which is near the highest point of July.
Our oscillators suggest that there still might be some upside left. The RSI is above 50 and points to the upside. The MACD, although is back below its trigger line, still, remains above zero and seems to be curving back up again. Both indicators are somewhat in support of our main scenario.
In order to shift our view to the downside, we need to see a clear break of the aforementioned upside line and a price-drop below the 109.00 hurdle, marked by the low of July 24th. This way, more investors could start liquidating on some of their positions, which could force the price to fall further. Such a move down could bypass the 107.50 obstacle and lead the stock to the 105.30 mark, which is the high of July 23rd. We could see UPS initially stalling around there, but if there are still not many buyers joining in, the share price might continue drifting further south, aiming for the 100.80 level. That level acted as good support on July 9th.
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