4 Trade Ideas for UPS: Bonus Idea

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

UPS, $UPS, spent over 8 months in a sideways channel around the 200% extension of the retracement of the pandemic drop before moving higher in April. Shortly after it gapped up and ran to a top over the 300% extension. A pullback in June reversed to the prior high and then it gapped down at the end of July to confirm a double top. It has held in consolidation since over support and just above the 200 day SMA.

The RSI is dropping in the bearish zone with the MACD stalling in negative territory. There is support lower at 188.50 and 181 then 177 and 173 before 167.50 and 157.50 then 154.50. Resistance higher comes at 195 and 198.25 then 210. Short interest is low at 1.1%. The stock pays a dividend with an annual yield of 2.15% and has been trading ex-dividend since August 20th. The company is expected to report earnings next on October 26th. A business rival, FedEx, is reporting earnings on Tuesday after the close.

The October monthly options show the open interest biggest at the 195 and 190 strikes on the put side and at the 195 strike on the call side. In the October 29 Expiry open interest is just starting to build and spread from 190 to 170 on the put and from 195 to 215 on the call side. November options are light on open interest so looking to the December chain it is spread from 185 to 165 on the put side and from 195 to 220 on the call side.

UPS, Ticker: $UPS

Trade Idea 1: Sell the stock short on a move under 188.50 with a stop at 192.50.

Trade Idea 2: Sell the stock short on a move under 188.50 and add an October 192.50/200 Call Spread ($2.35) while selling the October 29 Expiry 170 Put ($1.40).

Trade Idea 3: Buy the October 29 Expiry 185/170/155 Put Butterfly ($2.00).

Trade Idea 4: Buy the October 185/170 Put Spread ($2.20) and sell the November 160 Put ($1.20).

Premium Content

The Best

The Rest Premium

Free Content

The Rest

If you like what you see sign up for more ideas and deeper analysis using the Get Premium button above.   

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 the September Triple Witching in the books, saw equity markets continue to show some signs of short term weakness.

Elsewhere look for Gold to continue its pullback in consolidation while Crude Oil continues a short term move higher. The US Dollar Index continues to move to the upside while US Treasuries consolidate. The Shanghai Composite looks to continue to pullback from resistance while Emerging Markets continue a short term move lower.

The Volatility Index looks to remain at moderate levels removing the stimulus for equity markets to the upside. Their charts reflect this, especially on the shorter timeframe with the SPY and QQQ continuing to pullback. On the longer timeframe the QQQ and SPY remain in healthy uptrends. The IWM remains detached from them in consolidation on both timeframes. 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.

blog comments powered by Disqus
Dragonfly Caps Blog