If past is precedent, UPS will not break out of its recent rut anytime soon
The shares of United Parcel Service, Inc. (NYSE:UPS) are down 2.6% to trade at $171.44 this afternoon, as broader market headwinds blow on Wall Street. Shares have made valiant attempts to come off their May 19, annual low of $165.34, but still carry a hefty 19.7% year-to-date deficit. If past is precedent, it does not look like the security will break out of this rut anytime soon. This is because UPS just ran into a historically bearish trendline that has pressured the shares lower in the past.
According to Schaeffer's Senior Quantitative Analyst Rocky White's latest study, UPS is now within one standard deviation of its 50-day moving average. The delivery name has seen five similar signals over the past three years, and was lower one month later 60% of the time, averaging a 4% loss for that period. A comparable move from the stock's current perch would place it at a fresh annual low of $164.59.
The brokerage bunch is split toward United Parcel Service stock, meaning there is plenty of room for pessimism to build. In fact, 10 analysts call the security a "buy" or better, while the remaining 10 say "hold" or worse.
A shift in the options pits could also add pressure. This is per the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.76, which sits higher than just 13% of readings from the past year -- indicating short-term options traders are incredibly call-biased at the moment.