FedEx Corporation (FDX) reports earnings next week, with Wall Street analysts expecting earnings per share of $1.86 in the fourth quarter of 2020 sales of $ 16.7 billion. The stock hit a low after a 77 decrease of the reaction mixed third-quarter results in March, by initiating a reversal of the wave that has recovered less than 80% of these losses. More importantly, FedEx stock has gone down below new resistance generated by a high volume of break-through with the 2019 low in the $130.
The stock has struggled since Amazon.com, Inc. (AMZN) has decided to bring the majority of the parcel delivery in-house to reduce costs. The challenge of competitiveness forced a distribution from a trim model in 2018 for FedEx stock, initiating a downward trend that has touched a seven-year low in March. The mixed performance since that time has failed to launch a new trend, FedEx, despite a temporary recovery in business on Amazon, unlike a lot of blue chips in recent weeks.
The company has suspended the year 2020 forecast in March, citing the case of a pandemic of uncertainty, but it offered a marginally positive update in April that cited the improving Asian demand. However, most of the release focuses on a deteriorating liquidity outlook, revealing the instability that could undermine the company in the coming quarters. A recent $ 348 million of impairment charges on this theme, with impairments intended to strengthen the balance sheet of the company.
The next week of the confessional, should be closely monitored, because the packaging industry can act as a “canary in the coal mine” for the U.S. economy, the expansion of the economic growth and the reduction during recessions and recoveries. In the Long-term consequences of the pandemic was difficult to assess because of political pressure and misinformation, with the outbreak in the south and South-west, as well as low chances for an effective vaccine until 2021, containing the optimism.
Fedex Long-Term Chart (1991 – 2020)
An upward trend in FedEx shares made steady progress in most of the 1990s, peaking at $61.88 in the second quarter of 1999. The stock sold for $30 about nine months later, completing a trading range that has held intact until 2003, the cup and handle breakout. This gathering unfolded through several waves, reaching $120.01 in May 2006. Who has scored the most high for the next seven years, in front of a large topping pattern that broke down in the fourth quarter of 2007.
The stock has fallen to a seven-year low in the bottom of $30 in 2009 and turned over, dropping out of nearly 100 $in 2010. That content level progress in 2013 the breakout that marked the beginning of an exceptionally strong price action and healthy returns. The increase of the pause in 2014 and a recovery in 2016, more than double the price in January 2018 all-time high to $274.66. He then dug a large triangle down, breaking down the fourth quarter.
FedEx Short-Term Outlook
Buyers reappeared after the December low of$ 155, but the increase of the stalled well below the prior high, the sculpture of the first of a series of lower highs that have continued unabated through the second quarter of the year 2020. She broke out in 2018 and 2019 of support during the first quarter swoon, the establishment of new resistance in the $130 and $140s. The second quarter rebound has failed to go up, either of the barrier, keeping the long-term downward trend is fully intact.
The monthly stochastic oscillator engraved on a 13-month period a rounded bottom and has entered into a new buying cycle in March 2020, the prediction of the relative strength through the end of the year. This signal did not translate into much upside yet, perhaps because the price action has caught a canal descending from December 2018, with the second quarter bounce invert to the channel resistance at the beginning of this month. The reverse of the bypass channel will be necessary in this configuration to set new buy signals, but the 50-month exponential moving average (EMA) near $170 is likely to put an end to any advance dead in its wake.
The Bottom Line
FedEx stock has rebounded over a period of seven years, but not managed to up the key price levels broken in the first quarter of sales.
Disclosure: The author held no positions in the aforementioned securities at the time of publication.