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Swing Trade Idea (UNP) – August 08, 2023

Our bearish trade for Tuesday, August 8th is Union Pacific Corporation (UNP). UNP is part of the Industrial Sector, which has performed at -0.77% over the last week, with UNP underperforming at -1% over the same period.

UNP is pulling back from a key area of resistance at $240 and is aiming to continue below the $230 mark. As this is a counter-trend trade, we believe that UNP will not trade higher over the duration of this trade. This trade has a 38.50% premium/width ratio which provides excellent risk to reward. 

As a close, if UNP were to trade above $235 for multiple days, this would invalidate our analysis and we will consider cutting losses on the trade. We also want to consider cutting losses on this options trade if the value of the vertical spread moves above $7.64.