UPS breaks back below 20-day moving average
United Parcel Service Inc. (UPS) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
UPS ended Wednesday at 159.87 losing $1.66 (-1.03%) on high volume, underperforming the S&P 500 (-0.46%). The bears were in full control today, moving the market lower throughout the whole session. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (UPS as at Sep 16, 2020):
Wednesday's trading range has been $7.83 (4.69%), that's far above the last trading month's daily average range of $3.73. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently notably lower than usual for UPS.
Notwithstanding a strong opening the stock closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
The share closed back below the 20-day moving average at 160.26. When this moving average was crossed below the last time on September 8th, UPS actually gained 2.14% on the following trading day.
Although United Parcel is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Selling might accelerate should prices move below the nearby swing low at 158.37 where further sell stops could get activated. As prices are trading close to September's low at 154.63, downside momentum might speed up should the market mark new lows for the month.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Black Candle" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for United Parcel. Out of 497 times, UPS closed higher 55.33% 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 60.16% with an average market move of 0.56%.