UPS Possible Swing Top

1/22/19 12:22 I see 5 reasons why UPS may be hitting a swing high today or within a few days. You can't say a turn down has started yet, so its more conservative to wait for confirmation. But it might be worth entering a small bearish position if we're lucky enough to catch the top. I got the UPS April 18th $95 Puts. I like the volume, open interest, and 27% Delta of those options in the April option chain.

I see 4 possible targets:

Previous swing low $89.92
The Head & Shoulders projection (yellow), which is also the 27.2% Fib extension $82.50
The AB/CD projection (light blue) $75.75
The 61.8% Fib extension $73.04

I like the $82.50 target the most because you have confluence of 2 different independent measures, and I believe the 27.2% Fib extension gets hit more often than the 61.8% extension.

Here are the 5 things I see that give me confidence there's a good chance this trade will work:

General down trend of lower lows and lower highs.
Head & Shoulders neckline break and retest (thick yellow horizontal line).
50% Fib retracement possible resistance.
50 DMA possible resistance.
High stochastics, well over 80%.

When I see good evidence there has been a strong rejection I'll increase my short position.