Clicky

FDX Price Target Hit for 9% Gain- The Canary Looks Sick

FDX (Fedex Corp) hit the first & sole official price target for a quick 9% gain. FDX was added as an Active Short Trade on Nov 30th following the breakdown below dual uptrend lines. The immediately fell sharply, hitting the T1 level (145.27) on Friday and has now clearly taken out that level with the stock trading down over 12% from entry. Previous & updated daily charts below:

As T1 was the sole official price target for this trade, FDX will be moved to the Completed Trades category. However, as per the original post, especially considering the impulsive nature of the selloff since the breakdown less than 2-weeks ago, FDX is quite likely to reach the 2nd & 3rd price targets that were listed on the weekly chart in that previous post. For those still short & planning to hold out for additional gains, consider lowering your stops at this point to protect profits (a daily close above 146.25 looks ideal). The T2 level comes in around 130.10 with the T3 level around 119.75. Those are the actual support levels, unadjusted for an optimal fill so best to set your buy-to-cover limit orders about 8-10¢ above those levels. Previous & updated weekly charts below:

On a related note, not only does FDX appear to be headed considerably lower in the coming months but UPS (United Parcel Service) appears to be on the very of breaking down from a Complex Head & Shoulders Topping Pattern. Complex H&S patterns are topping patterns just like normal H&S patterns except they consists of multiple shoulders instead of just one left shoulder & one right shoulder.

UPS daily Dec 14th

UPS daily Dec 14th

It has been pretty apparent to most that Dr. Copper was stripped of its license to forecast the future direction of the economy. However, FedEx & UPS are often used as a forward indicator of economic activity & if these charts continue to play out as expected, it would indicate a significant slowdown in the US & global economy. One has to wonder with oil prices tumbling towards 11-year lows (and crude prices as one of the largest expenses to FDX & UPS), what will happen if & when oil prices start to rise? In other words, without digging into the fundamentals of these two companies, I would have to assume that much of the reasoning FDX is trading about 25% below its June highs is the fact that the market is pricing in future weakness in demand (i.e.- economic activity). JMHO on the fundamental reason for the drop but to see these stocks selling off despite plunging oil prices should raise a yellow flag.

0
Dec 14, 2015 11:40am|Categories: Completed Trades - Short|Tags: |3 Comments

3 Comments

  1. shah December 14, 2015 6:10 pm at 6:10 pm

    GDX a good add here with the positive divergence if we don’t gap down too much tomorrow?

    http://screencast.com/t/vvZDcoyr1AP

    0

    • shah December 15, 2015 9:25 am at 9:25 am

      @Right Side Of The Chart thanks will keep that in mind

      0

  2. rsotc December 15, 2015 8:58 am at 8:58 am

    @shah – I shut down early yesterday so just reading your question now. With the FOMC announcement almost certain to cause a knee-jerk reaction (or two) in gold & the miners, probably best to just wait until after the dust settle (no pun intended) tomorrow after the 2:00pm ET announcement. I do see that divergence but it would actually look better to me if GDX made one more marginal thrust lower. Doing so would put in a second, higher low on the MACD on the 5-15 minute time frame. There’s a nice gap & horizontal support just below around 13.49 at which I would prefer to see GDX backfill before stepping in.
    Yesterday’s sell-off in the miners did a little damage to the charts, clearly taking GDX below that ascending price channel that I recently highlighted on the intraday charts but as long as it remains (on a 60-minute closing basis) above the 13.34ish level (key support) I believe the charts still look constructive. Again, probably best to keep things light or stand aside until the FOMC decision and the volatility that will immediately follow is out of the way.

    0

Comments are closed.