This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

FedEx Shares Face Considerable Downside Risk on DOJ Indictment

Stocks in this article: FDX

NEW YORK (TheStreet) -- Drug trafficking is a serious crime and shares of FedEx (FDX) shares are vulnerable following the package delivery company's disclosure that the Department of Justice filed criminal charges that the company was shipping misbranded controlled substances such as Ambient and Valium.

If the company is found guilty, shares of FedEx could take a serious hit. But such an event could take months.

FedEx is a member of the Dow Jones Transportation Average ,which set an all-time intraday high at 8406.17 on Thursday helped by strength in FedEx. This average has a positive but overbought weekly chart with its five-week modified moving average at 8136.65.

These U.S.-Listed Energy Companies Might Get Trapped in Ukraine Conflict

What's Good for General Electric May Finally Be Good for Its Stock

Cramer: This Firm Has No Competition

FedEx ($151.90) reported quarterly results on June 18 for its quarter that ended in May and the company beat analysts estimates by 10 cents earning $2.46. The stock is up 46% over the last 12 months and has a 12 month trailing earnings per share ratio that's elevated at 21.8. The dividend yield is a paltry 0.5%.

Let's look at the daily chart:

Courtesy of MetaStock Xenith

FedEx traded to an all time intraday high at $155.31 on Thursday, then ended the day below Wednesday's low at $152.25. This is the first step in a daily key reversal. FedEx would have to close lower today, below Thursday's close at $191.90 to continue the reversal signal. A lower close today and Monday would confirm the key reversal. Shares are currently around $152.

So far today the stock has held its 21-day simple moving average at $151.19 and is well above its 50-day and 200-day SMAs at $145.41 and $137.09, respectively. FedEx has been above its 200-day since June 25, 2013 and that's the downside risk on a short-term "reversion to the mean."

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,959.44 +154.64 0.87%
S&P 500 2,078.54 +7.89 0.38%
NASDAQ 4,781.4240 +16.0440 0.34%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs