Is it too late to take delivery on stock of FDX and UPS?
Discussed in this article: FedEx Corp. ( $FDX )
I want to look at oil, and FedEx ( NYSE:FDX ) and UPS, First of all you look at of FedEx ( NYSE:FDX ), it popped out of this volatility squeeze, nice earnings, and the stocks just kept going. It’s starting to drift sideways a bit, but you look at the stochastics indicator here. Everybody says overbought, oversold, it’s a momentum indicator; really, really strong momentum here and it just it just keeps on going.
So you look at UPS ( NYSE:UPS ) and we can see the same thing. This has gone a little more parabolic, again, very strong upside momentum, which by the way you see here, before. By the way when stochastics start to roll over you’re likely going to see that with the price, but look how long it took the last time, it took a while. So I wouldn’t expect UPS ( NYSE:UPS ) to do that, it’s probably just going to drift sideways a bit.
So these are two stocks that you can stay long. I would think the real reason is oil. With oil drifting lower gas is getting cheaper, which means that it’s cheaper for these companies to ship their stuff. And since supposedly the economy’s picking up, that’s what everybody thinks to whatever extent, then demand is expected to stay strong, maybe even increase, because the fed is not going to be doing anything other than buying bonds in our lifetime, and unless you’re five years old listening to this that’s probably the truth.
So you’ve got these stocks that are doing really well. So how do you stay long? What I would suggest doing is use something like the 10-day moving average as a reference for stops; that works here. Even on UPS ( NYSE:UPS ) you can use the 8-day moving average, that works. FedEx ( NYSE:FDX ), that even works here too. But the thing is, if you’re just setting a stop right when this thing tags the 8-day moving average, that’s not going to work out too well. Because you will get these things, they will touch them, and then continue moving.
So what I would suggest doing is looking at these, either the 8 or the 10-day moving average, and when you see the stock close below that moving average for like two days in a row, that’s when you want to start liquidating your position. But until that time you want to stay long because finding these stocks that move like this is not something that happens every day, so when you get on it, stay on it, that’s what you want to do for these two.