FedEx (FDX) is looking toppy. We last looked at the chart of FDX on September 14 and recommended, "I have no special information about the upcoming earnings figures for FDX but share prices are pointed up and the $270 is the next logical price target. Risk a close below $215 on longs now. Some period of sideways price action should not be ruled out before further gains."
Prices reached our $270 target and more but now the trend has shifted from up to sideways. Let's check and see how the charts look now.
In this updated daily bar chart of FDX, below, we can see that prices pulled back/corrected into October and made a higher high earlier this month. Prices are trading below the declining 50-day moving average line and retesting the late October and early November lows.
The trading volume surged last week and the On-Balance-Volume (OBV) line has turned from sideways to lower, telling us that sellers of FDX are more aggressive.
The 12-day price momentum study has been making lower highs from August to October to December even as prices have made higher highs. This is a bearish divergence and can foreshadow a period of price weakness ahead.
In this weekly bar chart of FDX, below, we can see some weakness developing. Prices are still in an uptrend above the rising 40-week moving average line but the weekly OBV line is toppy and the 12-week price momentum has declined to zero since October.
In this daily Point and Figure chart of FDX, below, we can see a potential downside price target in the $222 area.
Bottom line strategy: I assume traders took profits on FDX longs at $270 or higher. Stand aside as the charts look toppy and we could correct down into the $225-$210 area in the weeks ahead.
