Earlier today, United Parcel Services (UPS: sentiment, chart, options) reported that chairman and chief executive officer Mike Eskew will step down at the end of the year and will be replaced by Scott Davis, currently the company's vice chairman and chief financial officer. Continuing with the executive shuffle, UPS named Kurt Kuehn to replace Davis as chief financial officer.
Since hitting a low in September, the shares of UPS have edged more than 4% higher along their 10-day and 20-day moving averages. However, the stock must still overcome resistance in the 79 area, which has capped the shares since early August. From a longer-term perspective, potential support is rising into the region in the form of the security's 20-week moving average, which it has not closed a week below since the beginning of June.
Options speculators are relatively skeptical of the shares. Schaeffer's put/call open interest ratio for UPS stands at 0.66, which is higher than 70% of those taken during the past 52 weeks. In trading today, the October 75 call was the most active front-month contract with nearly 1,800 contracts changing hands. Open interest currently stands at almost 34,000 contracts. Meanwhile, on the put side, the October 75 put was the most active with only 235 contracts changing hands. Open interest stands at 16,200 contracts.
Discuss this article:
"I agree Badger, what was that about markets falling on a 'slope of hope'? It seems that everyone, including Bernie, is HOPING that the Fed will cut (which they will because, they are the lap dogs of the financial services industry - their 'concern' about inflation will be out the window and money printing will go wild!). Then they are HOPING that the cutting of rates will actually prevent a recession by spurring the moribund consumer to keep spending their last penny of equity (or accumulate even more record amounts of debt). What happens if none of this works? I think the crisis of confidence in the Fed that follows the 'shock' of its failure to manipulate supposedly free markets will be one of the unforseen developments to contend with in this latter decade. Only then can we all understand that hope is the most expensive word in the English language." Respond
"Nonsense, Treasuries aren't scarce. Bernanke's Friday speech has lots of clues they want to regulate. Pvt mtg co's are not under their jurisdiction. Holding off lowering will throw more 'bad apple' mtg lenders into bankruptcy, which moves a lot more lending to banks, which do fall under the regulatory arms of the Fed. Homeowners are toast anyway, resets are on LIBOR not Fed Funds. Basically nobody used the discount window - suggesting there isn't as big of a liquidity crisis as wall street would have you believe. Wall street wants the interest rates lowered so the stock market will rally and bail them out of their bad decisions to buy CDOs. " Respond
"I think this is reflective of the sentiment of the street. Seems most traders are putting on positions with a rate cut priced in. Current yields on the treasury are saying the fed will cut rates. However, does this renewed bullish sentiment coupled with fairly good news on the economic front cause the fed to continue to hold the line at 5.25?" Respond
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