Skip to main content

How Far Can FedEx Rally After Earnings Beat?

Shares of FedEx are reacting well to the company's better-than-expected earnings. Let's see how the stock can get back to its all-time highs.

FedEx  (FDX)  was one of the notable winners on Friday, up about 6% after better-than-expected earnings. 

The stock has been a tear over the past year, surging from its March 2020 low. United Parcel Service  (UPS)  also has done well, as Amazon  (AMZN)  and other e-commerce platforms have seen an explosion in activity.

COVID-19 has helped drive more sales online, benefiting sellers and overwhelming logistics firms.

After a couple months of sideways consolidation, FedEx share are resolving to the upside. Now bulls want to know if the stock can rally back to its high, set Dec. 9 at $305.66.

To get there, shares would need to climb another 8.6% from current levels. If it gets there, its strong third-quarters earnings and solid outlook will be a driving force.

The other catalyst may be on the technical side.

UPS and Amazon are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells UPS or AMZN? Learn more now.

Trading FedEx

Daily chart of FedEx stock.

Daily chart of FedEx stock.

If the stock can hold above $278.60, it will close above multiple key levels. That includes the 61.8% retracement of the current range and the prior all-time high (all the way from 2018) at $274.66.

Further, it will put FedEx stock over all of its major moving averages. With its sideways consolidation over the past few months, these moving averages have turned into a tangled mess.

The hope is that they’ll now begin to trend higher and act as support, just as they did in the second and third quarters of 2020.

The next big level on the chart is the gap-fill mark at $286.22, from mid-December.

If FedEx can clear fill this gap and push above it, there should very little overhead resistance. The 78.6% retracement does sit near $290.50, but provided shares can clear that, $300 may be in the cards, along with the all-time high near $305.

Above that and we can start to look at upside extensions.

On the downside, let’s see how the stock handles its 21-day and 50-day moving averages. Both of these measures were solid support during the uptrend. To see them act as support again would be highly constructive to the bull case.

A move back below them puts $250 on the table.