UPS Plunges 10.57% To $90.84 As Bearish Signals Intensify

United Parcel (UPS) has experienced significant volatility, with the most recent session showing a sharp 10.57% decline to $90.84, marking two consecutive down days totaling 12.28%. This analysis evaluates technical indicators to contextualize current price action.
Candlestick Theory
Recent candlesticks reveal concerning patterns. The July 29 session formed a long bearish candle with a high of $98.19 and low of $90.72, breaching the psychological $90 support established in late 2023. This follows a hammer pattern on July 25 (low: $102.28, close: $103.56), which failed to sustain momentum. Key resistance now forms near $101-$103 – the July 25-28 consolidation zone – while $90 emerges as critical support. A close below $90 would signal potential acceleration of bearish momentum.
Moving Average Theory
Price has decisively crossed below major moving averages: the 50-day MA (∼$108), 100-day MA (∼$112), and 200-day MA (∼$120). This triple breakdown confirms a long-term downtrend, with the steepness of the decline suggesting persistent selling pressure. The expanding gap between shorter (50-day) and longer-term (200-day) averages underscores sustained bearish dominance. Any recovery would need to reconquer the 50-day MA first.
MACD & KDJ Indicators
MACD lines are deep in negative territory with the histogram expanding downward, confirming strong bearish momentum. KDJ shows oversold conditions (K: 15, D: 22, J: 1), though divergence exists: price made new lows while KDJ’s recent trough (July 29) didn’t exceed its July 8 low. This minor positive divergence suggests weakening downside momentum, but requires confirmation.
Bollinger Bands
Bands have expanded sharply during the two-day selloff, indicating volatility surge. Price currently trades near the lower band ($90.72), typically signaling oversold conditions. However, the lack of price pinning against the band and absence of reversal patterns like bullish engulfing candles reduce reliability of a bounce signal here.
Volume-Price Relationship
The July 29 selloff occurred on 25.8M shares – over 3× the 30-day average volume – validating bearish conviction. Distribution patterns preceded this: the April 3 breakdown (-9.15%) saw 10M shares (2× average), while subsequent rallies lacked volume confirmation. High-volume breakdowns below $95 suggest institutional selling, reinforcing resistance.
Relative Strength Index (RSI)
The 14-day RSI sits at 28, entering oversold territory. Historically, UPS has rebounded from RSI<30 (e.g., January 2025 recovery from RSI 26). However, oversold readings can persist in strong downtrends – as evidenced by April’s breakdown where RSI remained below 30 for three sessions before stabilization.
Fibonacci Retracement
Applying Fibonacci to the April-2024 peak ($145.01) and current low ($90.72):
- 23.6% level at $103.79 aligns with July resistance
- 38.2% at $111.30 corresponds with the 100-day MA
- 61.8% at $122.72 near the 200-day MA
Recent rejections at the 23.6% level emphasize its strength. A sustained move above $103.79 would signal potential trend reversal, while current price sits below all retracement levels.
Confluence & Divergence Observations
Confluence of bearish signals exists: volume-validated breakdown below key MAs, oversold MACD, and RSI<30. However, KDJ’s positive divergence and Bollinger Band proximity hint at potential near-term consolidation. The critical technical confluence zone is $103.79-$111.30 (Fibonacci 23.6% + MA cluster). Until reclaimed, the path of least resistance remains downward with heightened risk of extended declines below $90.
Probability assessment: Short-term oversold conditions may trigger a technical bounce toward $95-$98, but sustained recovery above $103.79 appears unlikely without fundamental catalysts. The weight of evidence suggests continued bearish dominance, with breaches of $90 targeting the $82-$85 zone (2023 support).