Shares peaked at more than $260 in January 2018. More than two years later, FedEx stock is almost 50% below that mark, closing Monday’s session near $135.
With the spike in e-commerce is quite evident — based on comments and results from Amazon (AMZN) - Get Report, Shopify (SHOP) - Get Report and others - one would think that FedEx was doing quite well.
Perhaps the company is and we will get one heck of a surprise when the company reports its quarterly results after the close of trading on Tuesday.
However, a picture is worth a thousand words, and in much fewer words the charts don't paint a pretty picture.
Shares have continued to make a series of lower highs, and are setting up in a tightening pattern that will either need to resolve higher and break this long-term downtrend or resolve lower and send FedEx into a possible tailspin.
Trading FedEx Stock
Using the weekly chart really highlights the underperformance investors have seen in FedEx stock. Shares have been under constant pressure, with the 50-week moving average continually acting as resistance for more than a year now.
However, investors also see how shares are coiling into a tighter and tighter range over the weeks. That leaves the potential for something notable to happen — at least, technically speaking.
On a bullish earnings reaction, investors will want to see the stock clear the 200-day moving average at $139.62 and the 50-week moving average at $142.81. To clear the latter, FedEx will need see a roughly 6% gain from Monday’s close. Up over 2% so far on Tuesday and shares are off to a good start.
Above the 50-week moving average and the June highs near $150 are the next upside target, followed by resistance between $165 and $170.
If the reaction is bearish, investors will want to see FedEx stock hold the $125 level. This mark was resistance in March and April, before becoming support in late-May and June. The 50-day and 10-week moving averages also come into play near $125.
Below $125 puts uptrend support in play (blue line), but if there’s a true shake-out in FedEx stock, I would be hesitant to put money to work on the thesis of this mark holding as support.
For now, let’s watch $143 on the upside and $125 on the downside.