Shares of United Parcel Service (UPS) - Get Report began to show signs of exhaustion late last week as the stock neared the $112 area. As this week began, UPS began to fade, and with today's drop, the stock is working on its fifth straight loss. With earnings just over a week away, investors appear to be losing confidence.

UPS' post-Brexit rally drove shares well past heavy resistance near $107. This area had previously held the 2015 peak as well as April and June highs. Once this level was cleared, UPS had plenty of room to run, but the new rally phase fell far short of reaching the 2015 high of $114.35. Of late, UPS has lagged the major indices badly. While the S&P 500 was reaching fresh rally highs yesterday, UPS was heading for a fourth straight loss.

Ahead of next Friday's earnings report, UPS is likely headed lower. For patient investors, further downside will present a low-risk entry opportunity. A drift down to the $108-to-$107 level, which would equal a 50% retracement of the post-Brexit rally, should be viewed as a buy. If the stock can hold this zone ahead of next week's news, it will have a solid foundation for a renewed rally phase.

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Disclosure: This article is commentary by an independent contributor. At the time of publication, the author was long UPS.