Watch these two transports stocks as Amazon, Target kick off online sales events, traders say

Walmart is in the midst of its five-day online sales event and Target, Best Buy and Amazon kicked off two-day digital discounts on Tuesday, marking the beginning of a longer holiday shopping season.

A shift to e-commerce this year has already benefited key transports stocks. Reliance on online shopping during the pandemic has given a big lift to FedEx and UPS in 2020 — FedEx has risen more than 80%, while UPS is up 50%.

This is a trend that should continue through the rest of the year, according to Boris Schlossberg, managing director of FX strategy at BK Asset Management.

"The holiday season itself will essentially be mostly virtual, mostly digital. That should be massively positive for both FedEx and UPS," Schlossberg told CNBC's "Trading Nation" on Monday, specifically betting on increased adoption among older shoppers.

Schlossberg does give one of those stocks an edge, though.

"Going forward, I really like UPS as a trade here. It's a very, very solid company. The parcel delivery model is what they're optimized to do," Schlossberg said.

"And to boot, they're not that expensive, and the yield is more than 2.5%. … It's a value and potential growth play going into the holiday season. I think as you see these record [sales] numbers explode, the market is going to show some enthusiasm by bidding the stock up."

Bill Baruch, president of Blue Line Capital, sees several key levels for both stocks.

"UPS has broken out above its previous high this year," he said during the same "Trading Nation" segment. "If it stays above $166 the path of least resistance is absolutely higher. I'd be worried if it does start to pull back a little bit, you've got the 50-day moving average creeping in, coming in just below $160 so if we start breaking below there … it could see a sharper pullback."

If it broke below $160, Baruch said, UPS could move as low as $135. UPS closed Monday at $176.54.

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Baruch is more cautious on FedEx, a stock that has yet to break out above its record set in January 2018. He pegged $225 to $240 as a buy range — it closed at $273.50.

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"Lastly, keep an eye on the iShares transports ETF, IYT. It's driven by the rails mostly, but you definitely have FedEx and UPS in there. And if we start to see that breakout — which it is starting to — then you could see broad tailwinds across the sector and that would lift these stocks also," said Baruch.

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