Exploring UPS insights

In today’s edition of the Daily Stock Report, we are going to provide an update on United Parcel Service (UPS). The last time we highlighted United Parcel Service (UPS) in our commentary’s was almost four months ago on March 26, 2025. Back then, the shares were exhibiting a steady downtrend since its peak in early 2022. The shares were deeply entrenched in the red unfavored zone of many of the reports it was found in on the SIA Platform including the SIA S&P 500 Index. The SIA Platform issued a Yellow Neutral Zone with a Red SMAX signal back on September 16, 2022, at a price of $176.71. At the time of our last commentary on March 26, 2025, the shares were at $109.96 which represented an approximately 40% drop in price since the yellow neutral zone signal. Since then, the shares have continued to weaken further as the closing price is now at $86.49 which represents an additional 27% drop since the March 26, 2025 closing price. This represents a total decline in price of almost 52% since September of 2022. This exemplifies the example of staying away from investments in the red unfavored zone. Capital preservation and avoiding portfolio destruction are important concepts at SIA. Many advisors may instinctively look for names in the unfavored zone with the mentality that the shares are oversold and a “value buy” is in play. However, “value buys” may in fact be “value traps” and the shares may continue to fall further in price which is in fact what has occurred here.

In looking at the candlestick chart we still see a steady pattern of lower highs and lower lows. The two long red candlesticks in late January and last week is indicative of the disappointing quarterly earnings releases with an increase in Volume. In last week’s earnings release the company reported mixed quarterly results and declined to offer full-year guidance, citing macroeconomic uncertainty which the market took a disliking to. What is most interesting is the SIA relative strength readings was already hinting at negative news for several months even before the earnings announcement as the SIA Platform had indicated deteriorating money flows well before January and last week’s news. Currently, the shares made a new lower low and next support really isn’t found until the $70 area, levels not seen since the March 2020 Covid meltdown. This will be an important level to watch to see if the shares can find support there. Resistance may be found at the short but brief rally at a little over a $100 prior to the last earnings release.

Let’s dive in and see what the Point and Figure Chart looks like today. Once again, the picture has not changed with a consistent pattern of lower highs and lower lows. In March’s update we identified support levels at $109.49 and below that, the $97.22 to $93.45 area which has failed to hold. As such the downward trend is still firmly intact as a new lower low has transpired this month with a column of O’s lasting 10 boxes thus far. Currently the shares are exhibiting a bearish double bottom pattern. The shares may find some minor support right here at $83.27 coinciding with where the shares were in the June 2020 level. Below that, next support is staggered at $73.94 and then $69.67 potentially halting further declines. To the upside, resistance is at its 3 box reversal of $91.93 and above that, the $100 round number and psychological level. With a SMAX score of 0 out of 10, UPS is not exhibiting any near term strength whatsoever against the asset classes and also has a negative sector backdrop as the Transportation Sector is ranked unfavored with SIA Market Sector Report.

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