Call Traders Target UPS After Stifel Upgrade

E-commerce trends could lead to plenty of opportunities abroad

Assistant Editor
Oct 14, 2021 at 10:57 AM
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United Parcel Service Inc (NYSE:UPS) is up 3.2% to trade at $190 at last check, after an upgrade from Stifel to "buy" from "hold," with a price-target hike to $224 from $210. Ahead of the holiday season, the firm believes the company's continued focus on yield management is a catalyst for short-term growth, and that e-commerce trends will lead to plenty of opportunities abroad. 

Today's pop has UPS breaking back above the 200-day moving average, a trendline that had been supportive since June of 2020, before the security dipped below it last month. Up 13.1% year-to-date, the equity is still a ways away from its May 10, record high of $219.59, with the $200 level looming above as familiar pressure. 

Increased optimism amongst the brokerage bunch could provide tailwinds for UPS. Before today's bull note, nine of the 20 analysts in coverage called it a tepid "hold" or worse. 

The options pits have been more bearish than usual, too. United Parcel Service stock's 10-day put/call volume ratio of 1.02 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands higher than 95% of readings from the past year, indicating puts are getting picked up at a much faster-than-usual rate. 

Today's options activity shows that a shift in sentiment may already be occurring. So far, 13,000 calls have crossed the tape, or four times the intraday average. The October 190 call is the most popular, followed by the 195 call in the same series. This means options traders are betting on more upside for UPS by the time these contracts expire tomorrow. 

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