UPS Can’t Deliver

The market’s have had a nice run so far this year, but not all stocks have participated.

If earnings season starts to damper the bulls’ enthusiasm there are plenty of stocks that are very vulnerable.

If United Parcel Service, (UPS) couldn’t rally with the bullish market over the last 10 days, it’s likely to have a rough time if the market pulls back.

Additionally, it’s chart will begin to break down when it trades under $96.50, and if it breaks $96 selling could accelerate.

Shorting stocks requires paying close attention to them, so don’t do it unless you’re willing and able to have stop loss orders in place and adhere to them.

I’m looking at this as an opportunity to profit if the market pulls back.

Even if the market doesn’t pull back, UPS has the potential to fall.
The big picture in UPS is that a break below $96 could lead to a test of the December low near $90 quickly.

However, $90 is major support, and UPS reports earnings on January 30th, so I would exit the trade on any sign of strength below $91 or before January 30th.

If UPS breaks $96.50 it’s a short. Due to the quick target price and time frame, the stop is over 97.50.

If you’d like a little more confirmation that the downward momentum has begun, then don’t enter until 95.90 is broken.

Trade smart,

Rick Nartarian, Chief Investment Officer
The American Investor Daily