Today’s Trade Idea: Buying UNP for bucket 2 swing trade

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Buying UNP for bucket 2 swing trade

  • Shares of transportation stocks have largely held up with broader US equity indices year to date and while they may face further headwinds through a multi-quarter lens, for now there may be a tradeable bounce
  • Shares of Union Pacific (UNP) remain bullish trend on the Market Rover and recently retraced lower by nearly 14%, right to its 200 day simple moving average

Entry: Buy UNP stock in the $208 – $217 area

Target 1: $218 Target 2: $222

Stop loss: A daily close below $207 would be a stop loss signal.

Options trade idea:  

Buying the UNP November 17th 2023 215 – 220 bull call spread. This means to buy the 215 strike call and sell the 220 strike call, all as one spread, i.e. as one trade.

On options positions we work with a 3 week maximum time stop. If the profit target or stop loss has not been reached within 3 weeks, one can then close out of the options trade or roll it out to the next month.

Chart: