Blue-Chip Airline Stock Preps for Quarterly Report

Shares of United Airlines sport a modest year-to-date deficit

Deputy Editor
Jan 22, 2024 at 10:23 AM
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The shares of United Airlines Holdings Inc (NASDAQ:UAL) are up 1.2% to trade at $39.28 this morning, ahead of the airline company's fourth-quarter financial report, which is due out after the close today. Below, we will take a look at UAL's technical setup, some past post-earnings reactions, and explore some of the options activity surrounding the stock ahead of the event. 

On the charts, United Airlines stock has contented with pressure from its 80-day moving average for the last three sessions, after it previously provided support during a volatile December. While UAL has gained 11.4% over the last three months, its down 4.5% already in 2024 and sports a more than 20% year-over-year deficit.  

A look at United Airlines stock's history of post-earnings reactions during the past two years shows a 50/50 response, though the shares did fall 9.7% after the October report. UAL averaged a post-earnings swing of 6.6% the last eight quarters, regardless of direction. This time around, the options market is pricing in a higher-than-usual move of 9.6%. 

Options traders have favored puts of late. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), UAL sports a 10-day put/call volume ratio of 1.68, which stands higher than 92% of readings from the past 12 months. In other words, puts have rarely been more popular during this timeframe.

 

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