UPS closes within previous day's range after lackluster session
United Parcel Service Inc. (UPS) Technical Analysis Report for Jan 24, 2020 | by Techniquant Editorial Team
Moving lower for the 5th day in a row, UPS ended the week -1.64% lower at 116.66 after losing $0.27 (-0.23%) today, but still outperforming the S&P 500 (-0.9%). Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (UPS as at Jan 24, 2020):
Friday's trading range has been $1.18 (1.01%), that's below the last trading month's daily average range of $1.60. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for UPS.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, one bullish candlestick pattern matches today's price action, the Last Engulfing Bottom Pattern. The last time a Last Engulfing Bottom Pattern showed up on December 4, 2019, UPS actually lost -1.25% on the following trading day.
Prices are trading close to the key technical support level at 115.72 (S1). After having been unable to move above 117.12 in the previous session, the share ran into sellers again around the same price level today, failing to move higher than 117.11.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling might accelerate should prices move below the nearby swing low at 115.55 where further sell stops could get triggered. With prices trading close to this year's low at 114.37, downside momentum might speed up should the stock break out to new lows for the year. Further selling could move prices lower should the market test December's close-by low at 114.25.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior High" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for United Parcel. Out of 574 times, UPS closed higher 54.88% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 55.57% with an average market move of 0.27%.