FedEx (FDX) Stock at Hidden Resistance
FedEx Corporation (FDX) has transformed itself from lagging transportation industry to leader in 2020, emerging from a brutal two-year bear market with a 250% more rally at its highest since December 2018. The shipping giant has Amazon.com, Inc. (AMZN) to thank the change, as the e-commerce giant postponed a broad-based internal delivery initiative to focus on demands for greater market share as a result of the COVID-19 pandemic.
The rally has now reached a strong resistance at $ 230.
A massive sell-off of the 200-day moving average could offer a low-risk buying opportunity.
The Relative Strength of FedEx shares has skyrocketed since that news, rising above transportation components already trading at all-time highs. Not surprisingly, United Parcel Service, Inc. (UPS) has also posted large returns, and both companies regain control of an industry under the considerable influence of the e-commerce giant. Even so, FedEx shares have now entered a high-probability reversal zone, adding risk ahead of Tuesday’s post-market earnings report.
Analysts expect the compañía 63.6 billion company to post earnings per share (EPS) of $ 2.69 on fiscal 17.56 billion in fiscal 2021 first quarter revenue. The stock climbed a healthy 16.44% after FedEx beat fourth-quarter estimates in June, backed by a wave of upgrades and high price targets. It has racked up more than 75 points since then, reaching an extremely overbought technical level that has triggered five reversals in the past 16 years.
The Wall Street consensus continued to improve during the quarter, it is now in a “Moderate Buy” rating based on 16 “Buy” and 7 “Hold”recommendations. No analyst recommends that shareholders sell their positions at this time. Price targets currently range from a low of just $ 100 to a high of $ 300, while the stock opened Monday’s session at about lunes 23 above the average target of $ 218. This placement suggests that FedEx shares are fully valued at this time.
A correction is a decrease of 10% or more in the price of a security from its most recent peak. Corrections can happen to individual assets, such as an individual stock or bond, or to an index that measures a group of assets.
FedEx long – term chart (2013-2020)
Chart showing FedEx Corporation (FDX) stock price performance)
FedEx shares exploded above their 2007 high at cuarto 121.42 in the fourth quarter of 2013, entering a powerful breakthrough that topped $ 180 at the end of 2015. It sold to a two-year low in January 2016 and became higher, breaking to a new high after the presidential election. This rally momentum recorded an all-time high at enero 274.66 in January 2018, at the same time as President Trump fired the first shot in the trade war with China.
The stock carved a downward triangle in October and broke support at $ 220, entering a persistent downtrend that recorded a long chain of lower highs and lower lows at the seven-year low of March 2020 at $ 88.69. It completed a round trip to the peak of February 2020 in July and exploded, confirming a new support in the exponential moving average (EMA) of 200 days at the same time. Momentum traders have taken over since then, lifting the shares to a 20-month high.
The rebound just crossed the .786 Fibonacci retracement wave at the same time as the monthly stochastic oscillator has posted the most extreme overbought reading in six years. Overall, the odds of a reversal and an intermediate correction have risen to the “likely” category, increasing the risk ahead of this week’s confessional. Side investors can expect a lower risk buying opportunity if the Bears take over for a few months, with the 200-day EMA rising through the $ 170 providing excellent support.