4 Trade Ideas for UPS: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

UPS, $UPS, started moving lower in November. It accelerated as it gapped below the 200 day SMA in February and made a bottom in March. It bounced along after that until a drive to the upside began in May. That stalled as it hit the 200 day SMA and it pulled back to the 20 day SMA. It has rebounded since to the 200 day SMA where it sits now. This price action created a Cup and Handle pattern that gives a price target to 138 on a break over 110.50.

The RSI is rising in the bullish zone with the MACD moving higher and bullish as well. Even the Bollinger Bands® are pointing higher. There is resistance at 110.50 and 112.50 then a gap to fill to 114.65 and 119.20 before 124.50. Support lower comes at 106.25 and 103 then 100. Short interest is low at 2.6%. The stock pays a dividend with an annual yield of 3.75% and has been trading ex-dividend since May 22nd. The company is expected to report earnings next on July 22nd.

The July options chain shows the largest open interest at the 105 and 100 strikes on the put side. But those are dwarfed by the open interest at the 110 and 115 call strikes. The July 24 Expiry, the first covering the earnings report, are building open interest but it is biggest at the 116 call. The August options show very large open interest at the 110 put while it builds to a much smaller peak from 100 to 120 on the call side.

UPS, Ticker: $UPS

Trade Idea 1: Buy the stock on a move over 110.50 with a stop at 108.

Trade Idea 2: Buy the stock on a move over 110.50 and add a July 24 Expiry 108/103 Put Spread ($2.60) while selling the July 24 Expiry 115 Call ($1.60).

Trade Idea 3: Buy the July/August 115 Call Calendar ($2.05) and sell the July 24 Expiry 100 Put ($1.00).

Trade Idea 4: Buy the August 100/110/120 Call Spread Risk Reversal (20 cents).

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After reviewing over 1,000 charts, I have found some good setups for the week.  These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which with June options expiration and quad witching behind, sees equity markets are mixed heading into the last full week of the first half.

Elsewhere look for Gold to continue to consolidate in the uptrend while Crude Oil consolidates in a broad range. The US Dollar Index looks to move to the upside in a reversal while US Treasuries pullback in their drift lower. The Shanghai Composite looks to continue the move higher in consolidation while Emerging Markets consolidate.

The Volatility Index looks to remain elevated but drifting lower making the path easier for equity markets to the upside. Their weekly charts look strong, especially the QQQ on the longer timeframe. On the shorter timeframe both the IWM and SPY have paused at the gaps from last week while the QQQ is ready for new highs. Use this information as you prepare for the coming week and trad’em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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