FedEx stock shows bearish technical sign ahead of earnings

FedEx stock shows bearish technical sign ahead of earnings

FedEx stocks were all the rage when Cowen reiterated its outperformance rating during the peak holiday shipping season.

But, the stock has not been delivered in recent months. Shares fell 13% in the quarter, the worst since March 2020. That precedes next Tuesday’s results.

Bill Baruch, president of Blue Line Capital, sees a warning forming in the chart.

“FedEx stock is actually trading well below its 50-day moving average and you see a death cross here,” Baruch told CNBC’s “Trading Nation” on Wednesday. “Plus, FedEx has now given up on its 2018 highs. Based on the charts, the stock finished very close to those levels. “

A death cross is formed when the short-term moving average, usually 50 days, drops below the longer-term moving average such as 200 days. This bearish indicator indicates a further decline in the coming times.

The main competitor UPS is in a similar form, Baruch said.

“We’ve owned UPS for a while and there was a huge jump in UPS after profits at the end of April, but it couldn’t catch up and it also left another gap… and now in May of last year a trendline is broken. go. So I think UPS and FedEx are looking very tired and I think maybe there is less to do, “he said declared.

The positives at FedEx outweigh the negatives, however, according to Gina Sanchez, CEO of Chantico Global and chief market strategist at Lido Advisors.

“There are a lot of benefits from here, but the environment is a challenge, so FedEx has positives and negatives. The good thing is that they made a big investment in capacity over the holiday season. One of the downsides is that it happens at UPS on the same day. So much competition there. But their assessment says it’s the other way around from here, ”Sanchez said during the same segment.

He added that the decline in profit growth and the resetting of expectations affecting the broader market had an impact on FedEx.

“Although FedEx is not expensive, the environment is still not great. I think it’s really cheap here and it could be a worthwhile buy, but there’s going to be a lot of volatility, ”Sanchez said.

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