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Fan Yang

United Parcel Service (UPS) to Test Previous Support as Resistance

United Parcel Service $UPS has been in consolidation and correction mode in 2018. The daily chart shows that price peaked around $135 in the beginning of 2018 fell to $102 and consolidated until November when price fell lower to $90. 

UPS Daily Chart

(click to enlarge)

Rebound vs. Resistance:
- After UPS came down to $90 a share, the market bought it up. 
- The rebound extended above $100 last week and is pushing towards a previous support area. 
- This previous support area $102-$105 should be monitored for resistance. 
- Note that the RSI is also approaching 60. A bearish market should keep the RSI under 60. 
- So, as price approaches $105 and the RSI approaches 60, we should get ready for some selling.
Bearish Outlook:
- Then, if price falls below $97, we would likely be looking for continuation of the correction mode, or at least retest the $90 support. Perhaps price will reach lower before finally bottoming around $87.50, which is still part of the support area around $90. 
- Below $87, the next support would be around $80. 
Upside:
- A break above $105 suggests the bearish correction might be shifting to more of a sideways market. 
- Still, I would want to see price break above $112.50 and the cluster of moving averages before considering a possible bullish outlook.
- In fact, if $105 does not hold as resistance, I would expect the next resistance to be in the $110-$112 area. 

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