Trading Strategies For FedEx Stock Before And After Q2 Earnings

FedEx Corporation FDX was sliding about 1% lower Tuesday as the company heads into its second-quarter earnings print after the close.

When FedEx printed mixed first-quarter earnings on Sept. 22, the stock briefly popped up about 5% the following day before settling to close the session flat.

For the first quarter, FedEx reported revenue of $23.2 billion, which missed the $24.01 billion consensus estimate. The company reported earnings per share of $3.44, beating the $3.35 consensus estimate. FedEx said its quarterly results were adversely impacted by global volume softness that accelerated in the final weeks of the quarter due to weakening economic conditions.

For the second quarter, analysts, on average, estimate FedEx will report earnings per share of $2.83 on revenues of $23.74 billion.

Ahead of the event, Evercore ISI Group analyst Jonathan Chappell maintained an Outperform rating on FedEx and lowered the price target from $225 to $202.

From a technical analysis perspective, FedEx’s stock looks bearish over the longer-term but ready to bounce in the short term, because the stock hasn’t printed at least a lower high since Dec. 13.

It should be noted that holding stocks or options over an earnings print is akin to gambling because stocks can react bullishly to an earnings miss and bearishly to an earnings beat.

Want direct analysis? Find me in the BZ Pro lounge! Click here for a free trial.

The FedEx Chart: FedEx negated its uptrend on Monday by printing a lower low under the most recent higher low of $170.15, which was created on Dec. 9. Although the uptrend is no longer intact, a downtrend on the daily chart won’t be confirmed until FedEx pops up to print a lower high.

If FedEx closes the trading day near its opening price, the stock will print a doji candlestick, which could indicate a bounce is on the horizon. If the stock closes the session near the low-of-day, FedEx will print a bearish Marubozu candlestick, which could indicate lower prices will come on Wednesday.

There’s a gap that exists on FedEx’s chart between $184.39 and $203.22 that FedEx is likely to fill at some point in the future because gaps on charts fill about 90% of the time. If FedEx recieves a positive reaction to its earnings print and surges up to fill that gap, the stock may find resistance at the top of the empty trading range.

If FedEx suffers a negative reaction to its earnings, the stock will lose support at the 50-day simple moving average, which would indicate longer-term sentiment has turned bearish.

FedEx has resistance above at $172.71 and $183.55 and support below at $166 and $155.48.