Joey left the following comment on another post today:
UPS is testing the 200dma at 75.76. If it breaks the 200dma would you consider shorting it or buying the Feb 75 or 80 put options. Yesterday I bought and sold the put options. It was down so much yesterday I thought it would make a dead cat bounce today but it kept heading south and is approaching the 200dma. If institutions don’t support the stock at the 200dma I think it could go lower. Any thoughts on UPS as a short candidate?
I agree that it should find support right here and if it doesn’t that may mean trouble. I can’t comment on the options but I would certainly look to short it if it broke the 200 DMA. But l’ll almost never chase a short that’s been in free-fall like UPS has been. If it broke the 200 DMA I’d look for it to bounce a bit and work off that oversold condition before trying to short it. This is definitely one to watch.
Mike-
Thanks for your reply on UPS. I will be watching it very closely. Sometimes I find it hard to find shares to short from my brokers so I do the next best thing and buy the put options. I find I use less capital and normally make more on the trades and less risk is involved but options are not for everyone.