Here’s How I Played FedEx Before Earning

Shares of parcel delivery giant FedEx (FDX) were higher in early trading on Thursday before releasing their third-quarter earnings numbers after the market close. Additionally, Stifel has upgraded their fundamental view of the company to a ‘Buy’ recommendation with a price target of $222.

Follow the charts.

In this daily bar chart of FDX, below, I can see a mixed picture. Prices have rallied from their late-September lows but the move is less stellar. Trading volume doesn’t seem to be expanding on pre-rising and that’s a negative for traditional chart-followers.

The On-Balance-Volume (OBV) line limped up from October to early February in an uneven show of more aggressive buying. The slope of the 50-day moving average is positive but the 200-day line is still trying to bottom out. The Moving Average Convergence Divergence (MACD) oscillator shows weakness since early February and is close to the zero line.

In the FDX weekly Japanese candlestick chart below, I can see that the price is in a longer-term downward sloping channel. The price is above the bottom 40-week moving average so that is a positive thing. Weekly trading volume shows a decline from October and that is not a positive development.

The weekly OBV line shows only a very modest bounce from the October lows. The MACD has moved above the zero line but has narrowed in recent weeks.

In this daily FDX Point and Figure chart, below, I can see a potential downside price target in the $169 area. A trade at $220 is needed to renew the uptrend.

In this weekly FDX Point and Figure chart, below, I see the same setup as the daily chart above. A bearish price target in the $169 area and a weekly trade at $220 is needed to reverse the chart to the upside.

Final strategy: The price of FDX has indeed risen from its late-September lows but the indicators are not particularly strong. I wouldn’t be one to actively buy FDX before earnings. I will probably reduce my long term exposure.