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JUL 2021: UPS $190- $195 Bull Call Spread

Stock

UPS

Trade Structure

$190- $195 Call Spread

Trade Date

07/27/2021

Price Paid

$250

Expiration Days

8/27/2021

THIS IS A DELAYED TRADE FOR EDUCATIONAL PURPOSES ONLY.

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Trade Rationale

Another good earnings, followed by profit taking. I took this trade based on the support level at $195. There is a gap down below at $175 though, but just because there is a gap doesn’t mean it will fill. Plus, UPS had good earnings and RSI is already in the oversold zone. Unless a broader market sell-off ensues, UPS should start turning back in the next few days.

Trade Selection Criteria

Overall market movement

This was a post-earnings trade. The individual stock’s price/action overrides overall market movements for these types of trades.

No Earnings or Significant News

Post earnings trade taken on the next day of earnings. 

Bollinger Bands outside Keltner Channels

Bollinger bands are clearly outside Keltner Channels.

RSI Analysis

Although, most post-earnings trades disregard mean reversion indicators like RSI/ADX, in this case RSI is in oversold zone which could result in a bounce

ADX Analysis

Post earnings trade mostly disregard mean-reversion indicators. 

Trade Analysis

UPS got stuck in a sideways consolidation, also known as a "squeeze" right after putting on this trade and literally did not budge the entire month. I was forced to close this trade on the last day of expiration for a meager 11% ROI

Trade Outcome

PART WINNER

Profit/Loss

$30

Beginning Account Balance

$15,700

Ending Account Balance

$16,600

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