FedEx Corp (FDX)
click to enlarge charts
Key technical elements
- FedEx, a global courier delivery services company that is dependent on the business cycle of the global economy thus its share price movement is likely to be sensitive to the outcome of the latest round of trade negotiation talk between U.S and China where an escalation in trade tensions can trigger a deceleration in international trading volumes.
- The 30% rally seen from its 26 Dec 2018 low of 150.94 has stalled at key medium-term resistance of 199.32 which is defined by the median line of a major descending channel in place since 18 Jan 2018 all-time high, 38.2% Fibonacci retracement of the major decline from 18 Jan 2018 high to 26 Dec 2018 low and close to the 200-day Moving Average.
- Right now, its price action is testing the 178.10 ascending support that has held every pull-back since 26 Dec 2018 low.
- But medium-term momentum has turned negative where the daily RSI oscillator has broken below a similar parallel ascending support at the 50 level.
- Relative strength analysis from the ratio of FedEx against its S&P Industrials Sector ETF (XLI) has continued to exhibit medium-term weakness/underperformance.
Key Levels (1 to 3 weeks)
Intermediate resistance: 186.10
Pivot (key resistance): 199.32
Supports: 178.10, 162.30 & 145.10/140.00
Next resistance: 226.20/231.80
The share price of FedEx appears vulnerable for a bearish breakdown below the 199.32 key medium-term pivotal resistance. A daily close below the 162.30 is likely to see a potential multi-week impulsive downleg to target the 162.30 major support (secular ascending trendline in place since Mar 2009 low) and a break below it opens up scope for a further down move towards 145.10/140.00 next (lower boundary of the major descending channel & Fibonacci expansion).
On the other hand, a daily close above 199.32 invalidates the bearish scenario for a squeeze up to retest the key long-term resistance zone at 226.20/231.80 (61.8% Fibonacci retracement of major decline from 18 Jan 2018 high to 26 Dec 2018 low & upper boundary of the major descending channel).
Charts are from eSignal
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.