FedEx Revs Higher on Earnings Beat, But Can It Keep Going?
Let's check the charts to see how we can tell if this rally could stay the course or skid off the road.
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Shipping giant FedEx FDX is trading more than 12% higher Wednesday after an earnings and revenue beat and favorable guidance. Let's do a quick check of the charts and indicators to see how high FDX may be headed in the days ahead.
In this daily bar chart of FDX, below, I can see a "difficult to trade"-to-the-price action of the past 12 months. Prices have been making higher-lows the past year but the big downside price gap and the big upside price gap make it hard for trend-following traders. Prices have crisscrossed the 50-day and 200-day moving average lines.
The daily On-Balance-Volume (OBV) line shows a weak pattern since late March. The Moving Average Convergence Divergence (MACD) oscillator has been improving the past month and may cross above the zero-line today.
In this weekly Japanese candlestick chart of FDX, below, I see a mixed chart. This week's candle pattern will not get plotted until Friday's close so we have to use our imagination. Prices are now trading above the 40-week moving average line. The weekly OBV line shows us a two year rising trend, but weakness in recent months. The Moving Average Convergence Divergence oscillator is slightly above the zero-line and it has been narrowing in recent weeks. We could soon get a bullish upside crossover.
In this daily Point and Figure chart of FDX, below, I can see a potential upside price target in the $395 area.
In this weekly Point and Figure chart of FDX, below, I can see the same $395 price target as shown on the daily chart above.
Bottom line strategy: After a sharply higher opening Wednesday, shares of FDX are likely to trade sideways for a few days. If the price action is relatively stable and it looks like traders are buying intraday dips then FDX could head still higher. Stay nimble.
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