What To Watch On UPS Stock Following Mixed Q3 Earnings

United Parcel Service, Inc. UPS gapped up about 2.5% to start Tuesday’s trading session after printing mixed third-quarter earnings.

The news prompted Jefferies analyst Stephanie Moore to initiate coverage on UPS with a Buy rating. Moore announced a price target of $190.

UPS reported quarterly adjusted earnings of $2.99 per share, beating the consensus estimate of $2.87 per share. The company reported third-quarter revenue increased 4.2% year-over-year to $24.2 billion, which missed the $24.42-billion consensus estimate.

The company reaffirmed its revenue guidance of approximately $102 billion for the full year 2022.

UPS said its earnings results were up 10.3% year-over-year, which showed strength in comparison to FedEx Corporation FDX. When FedEx printed its first-quarter earnings on Sept. 15, the company reported EPS of $3.44 compared to $4.37 in the year-ago period.

UPS was struggling to hold onto its gains Tuesday, and by late morning the stock had completely filled the lower gap. Tuesday’s high-of-day may end up being the next higher high within an uptrend pattern, and a retracement could provide traders who aren’t in a position with a solid entry if the trend holds.

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The UPS Chart: UPS reversed into an uptrend on Oct. 13 after hitting a new 52-week low of $154.87. The stock formed its most recent higher low on Oct. 20 and $160.32 and the most recent higher high was printed at the $174.80 mark on Tuesday.

• If UPS closes the trading day flat or near the low-of-day, the stock will print a doji or shooting star candlestick, respectively, which could signal lower prices will come on Wednesday. If that happens, bullish traders can watch for the stock to print a bullish reversal candlestick above the $161 mark.
• If UPS rebounds to close the trading session near the high-of-day, the stock will print a hammer candlestick, which could indicate higher prices are in the cards. The second most likely scenario, in that case, is that UPS will trade sideways to consolidate.
• There’s a gap above on the UPS chart between $180.40 and $184.58 that was created on Sept. 16. Gaps on charts fill about 90% of the time, which makes it likely UPS will rise up to fill the empty trading range in the future.
• UPS has resistance above at $175.13 and $185.28 and support below at $169.50 and $161.52.

Photo: Courtesy UPS