What’s Next for FedEx ($FDX)? – September 16, 2022
FDX
FedEx ( NYSE: FDX ) got absolutely crushed, kind of like a lot of the packages they deliver to me. They come in boxes and sometimes the boxes have holes in them and the stuff they are delivering to me is all dented up, kind of like the stock here.
If you bought it here today you are probably not particularly happy. However, Monday could bring a different story and this is why, if you look at the volume here, 34 million shares. Typically, the average daily volume is about 1.6 million shares, so this would be more. It is a Dow component, it’s very, very heavily owned, and a lot of funds are dumping this stock today. So Friday’s “dumpage” could be your present on Monday.
This is a pretty simple trade. First of all, we will just look at this on the intraday chart. It really didn’t do very much. Here it opened at 160.00 and closed at 161.00. So yippee, a hell of a trade. However, If on Monday, the stock were to trade to a new high versus Friday’s high, which is 161.84, then you could see a pretty nice move to the upside. Because there was so much puking of this stock that went on today that you almost felt bad, almost.
There are so many hands that have dumped this stock, that with this kind of selling, who bought it? For everybody who bought this stock today, because if you are selling it somebody’s buying it, how are they feeling? How do you feel if you bought this stock today? You have got to be feeling pretty good because if you got the worst fill possible it was at 161.84, so you are now down by $.82. In other words, you are fat and happy, you are not going to sell, you don’t have a regret.
There is not one share that was bought today that is held by some regretful buyer. Everybody who bought this stock today is very, very happy, which means you will not to see a lot of selling on Monday. Stocks have to trade, that is what they do after the opening bell. So if you don’t see a lot of selling on Monday, what are you going to see? You are going to see a lot of buying.
So what happens when there are a lot of folks who are really, really eager to buy the stock, and the folks that already own the stock aren’t really that eager to sell because they are pretty happy? They got a good deal on Friday, you are going to have to pay up for it. Instead of bidding 161.84, you are bidding 163.00, you’re bidding 165.00, you’re bidding 170.00. You are going to get a really nice trade out of this stock on Monday.
So if the stock runs above 161.84, that is when I would buy it. Your maximum risk on this should be at a trade back below 155.00. And that is less than 5 percent, it’s about 4.3. If you are buying it right at the high your risk is no more than 4.3 percent. You can set it tighter than that but I am doing this on Friday, I have no idea what the stock is doing on Monday. So you are setting your stop down here and then when the stock runs up above here you should do really well and you can thank me later.
Free Chart