Shares of the package delivery giant FedEx (FDX) were higher in early trading Thursday ahead of their third quarter earnings numbers due out after the market close. Additionally Stifel raised their fundamental opinion of the firm to a 'Buy' recommendation with a $222 price target.
Let's track the charts.
In this daily bar chart of FDX, below, I can see a mixed picture. Prices have rallied up from a late September nadir but the move is less than stellar. Trading volume does not look like it has expanded on the advance and that is a negative for traditional chart watchers.
The On-Balance-Volume (OBV) line limps up from October to early February in an uneven show of more aggressive buying. The slope of the 50-day moving average line is positive but the 200-day line is still trying to bottom. The Moving Average Convergence Divergence (MACD) oscillator shows weakness from early February and is close to the zero line.
In this weekly Japanese candlestick chart of FDX, below, I can see that prices are in a longer-term downward sloping channel. Prices are above the bottoming 40-week moving average line so that is a positive. The weekly trading volume shows a decline from October and that is not a positive development.
The weekly OBV line only shows a very modest rise from an October low. The MACD oscillator has edged above the zero line but has been narrowing in recent weeks.
In this daily Point and Figure chart of FDX, below, I can see a potential downside price target in the $169 area. A trade at $220 is needed to refresh the uptrend.
In this weekly Point and Figure chart of FDX, below, I see the same setup as the daily chart above. A downside price target in the $169 area and a weekly trade at $220 needed to reverse the chart to the upside.
Bottom line strategy: The price of FDX has indeed moved up from its late September low but the indicators are not particularly strong. I would not be an aggressive buyer of FDX ahead of earnings. I would probably reduce my long exposure.
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