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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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Featured Trade US Stock Potential bearish setup in FedEx

Article By: ,  Financial Analyst
February 21, 2019 5:05 AM

In our previous “deep-dive” technical analysis report titled “Global stocks are more likely to be climbing up a slippery wall of worry” published on 23 Jan 2019” (click here for details), we had highlighted 4 key barometer stocks to watch and FedEx Corp (FDX) is one of them.

Let’s us now review the latest technical elements of FDX.

Medium-term technical outlook (1-3 weeks) on FedEx (FDX)

Key technical elements

  • The on-going rally of 23% has reached a key medium-term resistance zone of 182.95/187.04 which is defined by a confluence of elements. The pull-back resistance of a former major/primary ascending channel support from Oct 2011 low, former major swing high areas of Dec 2014/Jun 2015, 38.2% Fibonacci retracement of the prior steep decline from 03 Dec 2018 high to 26 Dec 2018 low.
  • Bullish exhaustion signals have started to emerge at the 182.95/187.04 resistance. The prior 2 weeks of price action, the stock price has formed a weekly “Spinning Top” followed by “Shooting Star” candlestick patterns. Since its 171.28 low of 23 Jan 2019, the price action has started to evolve into “Expanding Wedge” range configuration where a test on its upper boundary on 13 Feb 2019 has been associated with a bearish divergence signal seen in the daily RSI oscillator.
  • The “gapped down” formed on 18/19 Dec 2019 (earnings downgrade) has been filled.

Key Levels (1 to 3 weeks)

Pivot (key resistance): 187.04

Supports: 176.90 & 164.70/163.10

Next resistance: 209.20

Conclusion

The key medium-term pivotal resistance to watch for FDX will be at 187.04 and a break below 176.90 (lower boundary of the “Expanding Wedge”) is likely to trigger a potential down move to target the next support at 164.70/163.10 (61.8% Fibonacci retracement of the current rally from 26 Dec 2018 low to 13 Feb 2019 high & former congestion area of 27 Dec 2018/03 Jan 2019).

On the other hand, a clearance above 187.04 invalidates the bearish scenario for an extension of the corrective rebound towards the next resistance at 209.20.



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