Swing Trade Idea (URI) – December 13, 2022
Our bearish trade for Tuesday, December 13th is United Rentals Inc. (URI). URI is part of the Industrial Sector, which has performed at 1.18% over the last month, as it has reached a level of exhaustion. URI has overperformed relative to its sector at 4.51% over the same period. As this is a counter-trend trade we expect URI to retrace lower.
URI had a strong rally into an area of resistance at $360 where it is now showing signs of exhaustion. As this is a counter-trend trade recommendation, we believe URI will retrace lower with the next support at $320, providing a good risk/reward bearish entry.
As a close, if URI were to trade above $360 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 below $7.48.
