The giant transportation company FedEx (FDX) is bottoming on the charts. In May FDX was trading around $315 or so, and it declined to the $220 area by early October (see the chart below). Prices rallied into November and then pulled back into early December. If we consider the recent pullback a "retest" of the October low, we should be constructive on the stock.
In this daily bar chart of FDX, below, we can see that prices are just above the rising 50-day moving average line. The 200-day line is flat and intersects above in the $270 area. The On-Balance-Volume (OBV) line dipped into early October, but has since improved. The Moving Average Convergence Divergence (MACD) oscillator is hugging the zero-line and could easily turn higher if prices rally.
In this weekly Japanese candlestick chart of FDX, below, we can see a lower shadow on a hammer-like pattern in late November. This is giving me confidence that we can see prices work higher from here. The slope of the 40-week moving average line is slightly negative but we could see prices test this line in the weeks ahead. The OBV line shows a rise from September. The MACD oscillator shows a cover shorts buy signal.
In this daily Point and Figure chart of FDX, below, we can see that the software is projecting the $204 area as a possible downside price target. We can also see that a trade at $250.70 will start to improve the picture.
In this weekly Point and Figure chart of FDX, below, we can see that prices reached a downside price target. A trade at $256 will improve the picture.
Bottom line strategy: Aggressive traders could go long FDX at current levels if they can risk a decline to $225. Add to longs above $256.
