Long-Term Technical SetUp
Rebound or Breakdown?
The long-term technical picture for FDX is looking quite appealing. The price action has been almost perfectly following the support and resistance of the price channel seen in the chart below.
If this trend continues, then we will see a rebound in the charts very soon and a long position could be a good idea. If we don't see a rebound at support and the price action makes lower lows, then a long position might be a bad idea at that point.
Risk vs. Reward
There is a very simple technical trade available with a safe risk to reward ratio based on the current technical setup. There appears to be a lot of upside potential with a nice gap fill possability.
Of course, we would need to see a little more upside in the current rebound to be confident in any major upside over the longer term, like the chart is depicting. So, as always, a stop loss is recommended.
Potential Upside Based on Fundamentals
FedEx's previous earnings call painted a bleak picture for the company. Hence the major selloff. But as of the start of this year, their shipping rates were increased and fuel prices have steadily been on the rise. Both of these factors will possibly contribute to higher revenue numbers. If margins are unaffected then this is a positive standpoint from a future earnings perspective.
Conclusion
Either way you look at it. FedEx has been around for a very long time. And they have continued to convince investors to bid up their companies share prices over the long run. The short-term technical picture looks good for a potential trade opportunity. But if lower lows are printed in the charts, then I believe there will be an even better trade opportunity in the future.
Good Luck Trading
As always, I am not a financial professional, and this is not investment advice. Be careful and be patient. Dont anticipate the market. Rather, participate in the market. Don't invest money that you can't afford to lose. Give some of your investments time and know when to cut your losses.
Don't be greedy. Don't invest in anything you don't understand. Don't put all of your eggs in one basket. Don't listen to the hype. Don't fomo or panic into or out of trades. Do your own due diligence. And just follow the trends. A trend is your friend. Good luck trading.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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Trade the trends via technical, fundamental, and macro analysis. Day Trades, swing trades, and long-term investments.
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ThirtyOne : I haven’t. I also have never really considered or thought about it. I definitely need to add FedEx and UPS to my list.
MonkeyGee : This is a good one. wish I caught it earlier
SpyderCallOP ThirtyOne: there are a lot of transportation/shipping companies that are solid long-term investment choices. Especially FedEx. When you think about it, transportation companies are like the life blood of a growing economy. I mean, goods and services in an economy must be transported from point A to point B. So following transportation companies are a good gauge into the health of an economy. That is why the dow jones transportation average is a good indicator of the health of the US economy.
SpyderCallOP MonkeyGee: I think there is still more time for this trade to play out.
ThirtyOne SpyderCallOP: I completely agree 100%. Definitely something I will add to my long term accounts at the right time. I’m about to look at these charts now.
ThirtyOne : Great post btw. Thanks for the content.
ThirtyOne : Do you think we’ll see a small correction before we move to the 245+ range? Nice momentum here currently.
SpyderCallOP ThirtyOne: More downside is a definite possability. After all the current trend has been downward for a while now. I could always be early. Hence the stop loss.
BelleWeather : Great post. I need to do some research on FedEx and understand how rising fuel costs boost their earnings though.
SpyderCallOP BelleWeather: Well when they increase prices on anything, then their revenue will increase usually. As long as their margins are not affected proportionately, then this increase in revenue will equate to more profit or net income. Not to mention that FedEx recently increased their fees for shipping in general. The extra fuel cost will likely get passed on the consumer as well. All of this could possibly look good on an earnings report.
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