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

NYSE: FDX | FedEx Corporation Common Stock 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

NASDAQ: JAKK | JAKKS Pacific, Inc. News, Ratings, and Charts

Best & Worst Performing Stock Industries for July 15, 2019

Led by ticker JAKK, "Entertainment - Toys & Video Games" was our best performing stock industry of the day, with a 2.53% gain.
NASDAQ: CAPR | Capricor Therapeutics, Inc. News, Ratings, and Charts

Best & Worst Performing Small Cap Stocks for July 15, 2019

CAPR leads the way today as the best performing small cap stock, closing up 93.48%.
NASDAQ: GLPG | Galapagos NV News, Ratings, and Charts

Best & Worst Performing Mid Cap Stocks for July 15, 2019

GLPG leads the way today as the best performing mid cap stock, closing up 17.16%.
: ZM | Zoom Video Communications, Inc. - Class A Common Stock News, Ratings, and Charts

Best & Worst Performing Large Cap Stocks for July 15, 2019

ZM leads the way today as the best performing large cap stock, closing up 6.97%.
NYSE: BABA | Alibaba Group Holding Limited American Depositary Shares each representing one Ordinary share News, Ratings, and Charts

Best & Worst Performing Mega Cap Stocks for July 15, 2019

BABA leads the way today as the best performing mega cap stock, closing up 2.62%.

Read More Stories


More FedEx Corporation Common Stock (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 1.4291 seconds.