Why Piper Jaffray's chief technical analyst thinks FedEx (FDX) shares are a Buy

NYSE: FDX | FedEx Corporation  News, Ratings, and Charts

FDX – Piper Jaffray analyst thinks the worst is behind FedEx shares.

Get Free Updates

Join thousands of investors who get the latest news, insights and top rated picks from StockNews.com!

 

It’s return to sender for FedEx.

The delivery company heads into its earnings release Tuesday with major losses. The stock has tumbled 36% from a 52-week high set in September, more than any of its peers.

But the worst could be over for FedEx after its sharp sell-off, says Craig Johnson, chief technical analyst at Piper Jaffray.

“It has taken enough pain. I look at FedEx as a bottom-fishing candidate,” Johnson said on CNBC’s “Trading Nation ” on Friday. “It has pulled back about 44% off the highs you’ve seen in January of 2018 and it looks like you’re forming some sort of double bottom in here.”

A double bottom is formed when a stock falls to a low, rebounds, falls to another comparable low and rebounds once more. The twice-hit low marks a support level.

“You’ve got really good support at $150,” Johnson said. “Sentiment seems really negative. I’d be a buyer of this stock in here and I think a lot of the bad news is already baked into these shares.”

FedEx would need to fall 10% to find support at that $150 level. It came close to that level before bouncing back at the year’s lows in early June, and previously at the December bottom.

FedEx isn’t the only transports stock stuck in neutral. The group has fallen into a correction having dropped more than 10% from 52-week highs. Like FedEx, names including J.B. HuntAmerican Airlines, and Avis are down at least 20% and stuck in a bear market.

Steve Chiavarone, portfolio manager at Federated Investors, says relief for the beleaguered transports is coming from the Federal Reserve.

“We know that the business sector has been a little bit weak. We see that in the freight volumes. We’ve had the overhang from trade and all the kind of uncertainty around that weighing on its sentiment,” Chiavarone during the same segment on Friday. “So when [the Fed does] eventually cut for those reasons, it’s going to help to have a reacceleration in the economy. We think that’s going to benefit all cyclicals, transports in particular.”

Markets are pricing in the near certainty of a fed funds rate cut at the end of July because Fed members dropped the word “patient” from their June statement and added that the “case for somewhat more accommodative policy has strengthened.” The chances of a 25-basis-point rate cut at the July meeting was at 67% on Monday, according to CME fed funds futures.

“The only thing for us is we prefer UPS over FedEx within our Federated fund — a little bit better yield, a little bit more of a self-help story. But we think the whole group can improve here, ” said Chiavarone.


FedEx Corporation (FDX - Get Rating) shares were trading at $162.88 per share on Monday afternoon, down $2.47 (-1.49%). Year-to-date, FedEx Corporation (FDX - Get Rating) has gained 1.73%, versus a 18.28% rise in the benchmark S&P 500 index during the same period.


This article is brought to you courtesy of CNBC.

More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
FDXGet RatingGet RatingGet Rating
AALGet RatingGet RatingGet Rating
CARGet RatingGet RatingGet Rating
JBHTGet RatingGet RatingGet Rating
UPSGet RatingGet RatingGet Rating

Get Free Updates

Join thousands of investors who get the latest news, insights and top rated picks from StockNews.com!

Top Stories on StockNews.com

: SFIX | Stitch Fix, Inc. -  News, Ratings, and Charts

This Online Apparel Stock Is a Marvelous Bargain

Separating this online apparel stock from other online ‘box’ services is the fact it has been posting a profit each quarter since it went public two years ago. Continue reading to find out what it is, and what it could mean for the investor.
: APHA | Aphria Inc. Common Shares News, Ratings, and Charts

How Is Aphria (APHA) Outperforming Other Cannabis Companies?

Yesterday Aphria (APHA) reported impressive first-quarter earnings before the opening bell.
: .INX | S&P 500 Index News, Ratings, and Charts

What the Most Important Fed News In Years Likely Means For Stocks

The market is laser-focused on interest rate cuts, with various Fed statements indicating how hawkish or dovish the FOMC plans to be often causing wild S&P 500 swings. Read to see what the most important Fed news likely means for stocks.
NYSE: PBI | Pitney Bowes Inc.  News, Ratings, and Charts

Find Out: Why I Just Bought Calls In This $4 Stock

Today's featured article covers why I just bought calls in a $4 stock. Continue reading to find out what the stock is and how investors can reap the benefit from it.
: ACB | Aurora Cannabis Inc. Common Shares News, Ratings, and Charts

Can Aurora Cannabis (ACB) Dominate the Cannabis 2.0 Market?

As we are just a few days away from the cannabis 2.0 launch in Canada, cannabis investors are looking for any glimmer of hope to get them out of one of the worst bear markets the sector has ever seen.

Read More Stories


More FedEx Corporation (FDX) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All FDX News
Page generated in 1.8666 seconds.