UPS lacks upside catalysts due to losing Amazon as a major client, rising fuel costs, and technical breakdown; no new business story identified.

Yeah, Lulu's down another 1.7% to just above $98 right now. Uh, your last pick I'm excited to hear about, too. It's UPS. Uh, we've seen UPS just lose momentum over the last month.

They're down. and it's brought them pretty much flat year to date because of this decline.

So, what's your thesis on UPS? Yeah, I framed this as asking the question, is the market telling us something that management isn't? Cuz management is saying that everything is great.

You know, Q2 revenue was up 7.6% year-over-year. We raised full guidance. Management said that the restructuring is behind them and that they're entering the second half with momentum.

But I'm paying attention to the stock chart and the stock chart isn't necessarily uh excited about those words. If you think about the business that they're in and what's going on behind the scenes, you know, they're winding down their relationship with their biggest customer, which is Amazon.

And so I think investors are questioning what happens when one of the biggest package shippers in America increasingly becomes its own delivery competitor. Because now Amazon is delivering I believe the number, don't quote me, I believe it's something like they're delivering about 85% of their own packages or they expect to deliver 85 to 91% of their own packages by 2029.

So I mean they're increasingly taking delivery into their own hands. Then you have to factor in that diesel hit a record high of 5.85 cents a gallon, almost $6 a gallon. And so that doesn't help a business whose business is having trucks on the road and flying airplanes to deliver packages.

And you really have to ask yourself, is there another reason for e-commerce or deliveries or packages to boom if you've lost your biggest e-commerce uh client, which is Amazon, and you're winding that down.

So, what is going to help packages and delivery pick up? I don't know that we have an answer for that. And I think that's what you're seeing in the stock. You also have a double top that happened around the 118 area.

But more importantly, this stock has just broken down below the 200 day moving averages. Then all the moving averages are crossing down. It's just not looking good technically.

And I also don't have a fundamental story or a business story to say this is why shipping and packages are going to increase for these guys. Here's who they're going to pick up that's going to be the next Amazon to turn it around. So, I don't I don't I don't see Let me

Right now, they're cutting costs to make their numbers, but at some point, there's only so much cost that you can cut and then you have to pick up new business. I don't see where the new business is going to come from.

All right, Rick. So, as we look at the technicals here for UPS, you can see that loss of momentum that I was highlighting after they had uh their stronger earnings report and said that the second half of the year was looking bright for them.

But as Jason highlighted, maybe the market knows something management isn't telling us.

Yes, perhaps trending lower here, important horizontal levels. 112 is the earnings gap beginning. 109 is the post gap highs and then another high point here near 107. Recent lows at 99 and then also a double bottom here near about 94.

To think about our moving averages, our 5day is the closest 100.85 is where we can see that one registering right now. a slip below our green trend line on the RSI as well is putting us uh rather close to the oversold area once more.

Now we can also see our volume profile gives us our point of control at 9645. So that could be a significant supportive area to watch out for.

Once again, options are going to be your friend. This is where advanced option strategies are on your side. I would look at this as doing a bare call spread. Again, I don't want to count UPS out, but I just don't see much reason for it to go higher.

Not necessarily saying it's going to go lower. I just don't see much reason for it to go higher.

And so, I'm looking at a short-term, when I say short-term, 36 days, the October 16th, 2026 uh 105 strike price call. You want to sell that one. Obviously, you want to be covered.

So, you want to go 10 points out and buy the 115 strike price call. you were getting about a 95 credit for that before the market open. It might be slightly lower because the stock um is up a little bit, 75 cents on the day, but your break evens at 105.90.

So basically for 36 days, you put $10 at risk. You can make about a 9% return.

Again, not much reason that the stock will go higher, but even if it does, you have a built-in $5 cushion, which I like. So you don't have to be 100% right. stock could go up long as it doesn't go up too much past $ five dollar stock could stay the same or go down you're still going to bring home that 9% return on this trade

and obviously my I'm wrong level if the stock breaks above the 200 day moving average you know if for some reason we get a nice bull run you want to shut the trade down take a small loss I still don't see that potentially happening though

all right UPS a little higher on the session though right now bucking the overall market trend we're up about 810 of a percent sitting exactly at $100 a share.