United Parcel Plunges 9.29%: Is This the Bottom of the Bearish Storm?

Summary
• UPS shares nosedived to $92.14, a 9.29% plunge from $101.58 after hours
• Intraday range spanned $91.44 to $98.44 amid Q2 earnings jitters
• Tariff uncertainty and muted EPS growth trigger sector-wide jitters

The market is reeling from United Parcel Service’s (UPS) 9.29% intraday freefall, with shares hitting $92.14 at 6:33 PM. The selloff follows a Q2 earnings report that revealed revenue declines, tariff headwinds, and a stagnant outlook. Traders are now dissecting whether this is a buying opportunity or a warning shot in a volatile logistics sector.

Q2 Earnings Disappointment and Tariff Uncertainty Spark Sharp Selloff
UPS’s Q2 earnings report painted a grim picture: revenue fell 2.8% to $21.2B, adjusted EPS of $1.55 missed estimates, and the company cited macroeconomic uncertainty as a reason for withholding full-year guidance. Compounding the issue, new U.S. tariffs on low-value Chinese shipments and Trump-era trade policy risks have dampened e-commerce demand on UPS’s China-U.S. routes. The market’s bearish reaction was swift, with shares plummeting into the 52-week low range of $90.55 as investors priced in margin compression and execution risks.

Air Freight & Logistics Sector Struggles as FDX Trails UPS
The Air Freight & Logistics sector, led by rival FedEx (FDX), has mirrored UPS’s woes. FDX shares fell 2.73% in premarket trading, reflecting broader trade policy risks. Both companies face declining e-commerce volumes due to tariff adjustments and shifting consumer behavior. However, UPS’s steeper 9.29% drop suggests amplified concerns over its China-U.S. trade line profitability and the success of its $3.5B network reconfiguration initiatives.

Options Playbook: Puts and ETFs to Bet on the Bear
• 200-day average: 114.85 (far above) | RSI: 47.11 (neutral) | MACD: 0.425 (bullish) | Bollinger Bands: 97.85–105.54 (oversold)
• Kline pattern: Short-term bullish | Moving averages: 30D 101.18 (support), 200D 114.85 (resistance)

UPS’s technicals suggest a fragile setup. The 200-day MA at $114.85 remains a critical resistance level, while RSI at 47.11 indicates oversold conditions. However, the 9.29% drop has pushed the stock near its 52-week low of $90.55, raising bearish momentum. Short-term traders should watch for a breakdown below $91.44 (intraday low) to confirm a bearish bias. The ETF data gap limits leveraged play, but options offer high-risk/high-reward potential.

Top Options Contracts:
• UPS20250808P91 (Put, $91 strike, 2025-08-08):
- Implied Volatility: 25.71% (moderate)
- LVR: 83.86% (high leverage)
- Delta: -0.375 (moderate sensitivity)
- Theta: -0.125 (high decay)
- Gamma: 0.092 (high sensitivity to price shifts)
- Turnover: 20,454 (liquid)
This put option thrives in a 5% downside scenario. With a strike price just above the intraday low, it gains value if UPS breaks $91.44, offering 83x leverage on a potential $0.74 move.

• UPS20250808P92 (Put, $92 strike, 2025-08-08):
- Implied Volatility: 23.82% (moderate)
- LVR: 64.96% (high leverage)
- Delta: -0.470 (moderate sensitivity)
- Theta: -0.137 (high decay)
- Gamma: 0.104 (high sensitivity to price shifts)
- Turnover: 39,935 (liquid)
This contract balances leverage and liquidity, ideal for a 5% drop. A $0.61 move could trigger a 64x return, but it requires a sharper breakdown below $92.00.

Aggressive bears should target UPS20250808P91 if $91.44 breaks. Cautious traders may cap risk with a stop above $93.00.

Backtest United Parcel Stock Performance
After an intraday plunge of -9%, UPS has historically shown mixed short-to-medium-term performance. The 3-day win rate is 53.38%, with an average return of 0.22% over that period. The 10-day win rate is slightly higher at 56.08%, with a return of 0.18%. However, the 30-day win rate drops to 50.17%, with a slight negative return of -0.26%. The maximum return during the backtest was 0.25%, which occurred on day 7, indicating that while there is some likelihood of a positive rebound, the overall performance is lackluster in the immediate aftermath of such a significant drop.

Act Now: Target Puts as UPS Faces Bearish Crossroads
UPS’s 9.29% plunge has created a high-stakes inflection point. The stock’s proximity to the 52-week low and bearish technicals suggest further downside is probable unless a $93.00 support level holds. Short-term traders should prioritize the UPS20250808P91 put option for aggressive bearish exposure. Meanwhile, sector leader FedEx (FDX) fell 2.73%, signaling broader trade policy risks. Watch for a breakdown below $91.44 to validate the bear case—or a rebound above $93.00 to signal a potential reversal.