FedEx Corporation (FDX) is a major shipping and freight transportation giant that also provides e-commerce and business services worldwide. Many of the Christmas gifts that have been cluttering homes and apartment lobbies were delivered to you from Amazon.com, Inc. (AMZN) via FedEx.
FedEx stock closed Friday at $240.05, up 28.9% year to date and in bull market territory at 31.3% above its 52-week low of $182.89 set on April 19. The stock set its 52-week high of $243.48 on Dec. 13.
Analysts expect FedEx to post earnings per share of $2.87 to $2.90 when it reports results after the closing bell on Dec. 19. Overall earnings expectations had been lowered since the company's prior report, but year-over-year earnings and revenue should be higher. One factor will be the company's success on reducing debt and interest expenses. It will also be interesting to hear guidance on FedEx's plans to shift to the electric truck offerings from Tesla, Inc. (TSLA). (See also: FedEx and UPS Stocks Surge to All-Time Highs.)
The daily chart for FedEx
The daily chart for FedEx shows that the stock has been above a "golden cross" since April 26, 2016, when it closed at $167.11. A "golden cross" occurs when the 50-day simple moving average rises above the 200-day simple moving average and indicates that higher prices lie ahead. This has obviously been the case for shares of FedEx, which set its all-time high of $243.48 on Dec. 13. Note how the stock has tracked its 50-day simple moving average, which is now at $225.62.
The weekly chart for FedEx
The weekly chart for FedEx is positive, with the stock above its five-week modified moving average of $228.46. The stock is well above its 200-week simple moving average at $171.69 and has been above this "reversion to the mean" since the week of Feb. 26, 2016, when the average was $132.12. The 12 x 3 x 3 weekly slow stochastic reading ended last week at 71.22, up from 62.34 on Dec. 8.
Given these charts and analysis, my trading strategy is not to chase momentum. It is not the time to add to positions in FedEx. Investors with long positions in FedEx should reduce holdings by 50% with the stock above my semiannual pivot of $238.59, or they could certainly consider a sell stop below this level on a negative reaction to earnings. Investors who wish to buy FedEx shares on weakness should do so on a test of my quarterly pivot of $231.13. (For more, see: FedEx, UPS Can Beat Amazon Delivery Entry: Goldman.)