UPS Stock Eyes Best Day in Years on Earnings Beat

The shipping stock hit a three-month high after beating earnings estimates

Deputy Editor
Jul 24, 2019 at 10:34 AM
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The shares of package delivery concern United Parcel Service Inc (NYSE:UPS) are up this morning on second-quarter earnings and revenue that exceeded analysts' estimates. The company cited strengthening e-commerce deliveries and a higher demand in domestic shipments, driven by increased Next Day Air volume from Amazon. UPS stock is trading up 8.7% at $114.40 in response, eyeing its fifth consecutive win. 

In fact, the equity is pacing for its best percentage gain since October 2008 today, on pace to exceed its Dec. 26, 2018 rally of 7.5%. However, while UPS peaked earlier at a new three-month high of $114.73, the stock is now staring back up at the $115 level -- a stubborn layer of resistance since last November. Nevertheless, UPS is set for its first close atop its 320-day trendline in almost three months. 

While analysts haven't yet chimed in, potential upgrades following the strong earnings from UPS could help the stock tackle looming resistance. Currently, 10 analysts call the security a "hold" or "sell," while only seven consider it a "strong buy."  

Pessimism has been pervading the options pits, too. UPS sports a 10-day put/call volume ratio of 1.13 on the the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio ranks in the 80th percentile of its annual range, suggesting that traders were favoring bearish bets over bullish by a wider-than-usual margin ahead of earnings. 

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