In today’s stock of the day, let’s take a look at UPS, which for a long time has been trapped in a strong and well-defined downtrend. That long-term weakness cannot be ignored, but recent price action finally shows early signs that selling pressure may be fading and a meaningful reversal could be developing.
The key technical development here is the emergence of an inverse head and shoulders pattern, marked with orange rectangles. It is not a perfect textbook example, but technical analysis is about structure and logic, not aesthetics. We can clearly see a sequence of lower lows forming the head, followed by a higher low that creates the right shoulder. This structure signals that bears are losing control and buyers are slowly stepping back in.
What makes this setup especially important is the breakout above the neckline, marked with black lines. That breakout activates a long-term buy signal and shifts sentiment to the bullish side. In addition, price is holding above the green horizontal support, which is a crucial level for the long-term outlook. As long as UPS remains above both the neckline and this green support, bullish sentiment remains valid. A drop back below these levels would cancel the signal, but for now, buyers clearly have the technical advantage.