Shares of logistics firm FedEx (FDX) rallied strongly Wednesday as investors responded favorably to the company's announcement of a cut in management headcount. FDX was higher in early trading Thursday with a Citi raising their fundamental recommendation to "buy" with a $240 price target.
Let's check out the charts and indicators.
In this daily bar chart of FDX, below, I can see that prices gapped lower in September on very heavy trading volume. Prices weakened further after the price gap but then stabilized in October with sideways price movement. Prices caught a bid in November and rallied above the 50-day moving average line and the slope of the 50-day line turned positive in December. FDX surged above the 200-day moving average line on Wednesday.
Trading volume does not show me expansion in the past four months but the math-driven On-Balance-Volume (OBV) line shows me a rise from October. The Moving Average Convergence Divergence (MACD) oscillator has been bullish (above the zero line) since November.
In this weekly Japanese candlestick chart of FDX, below, I see some bullish clues on the chart. Prices have rallied above the declining 40-week moving average line.
The trading volume has been shrinking but the weekly OBV line shows a quiet but positive trend the past four months.
The MACD oscillator crossed to the upside in November for a cover shorts buy signal but still remains below the zero line for an outright buy signal in this time frame. FDX is on the verge of breaking its downtrend (not drawn) from the 2021 high.
In this daily Point and Figure chart of FDX, below, I can see that the software is projecting the $243 area as a potential upside price target.
In this weekly Point and Figure chart of FDX, below, I see a possible upside price objective in the $254 area.
In this second weekly Point and Figure chart of FDX, below, I added a five box reversal filter. Here the software projects a target in the $315 area.
Bottom line strategy: Aggressive traders could probe the long side of FDX on a two-day pullback. Risk to $180.
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