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Key Takeaways
- FedEx shares fell sharply on Friday after the logistics company lowered its full-year forecast amid weak demand and uncertainty about the impact of Trump’s tariffs on the industrial sector.
- Early February saw the stock fall below the lower trendline in an 18-month ascending channel. Earnings-driven selling could be a catalyst for further declines.
- Investors should watch major support levels on FedEx's chart around $223 and $200, while also monitoring key resistance levels near $267 and $300.
FedEx (FDX), the logistics giant, slashed its full-year forecast Friday amid weak demand and uncertainty about the impact of Trump’s tariffs on the industrial sector.
During the shipper’s earnings call, CEO Raj Subramaniam stated that the demand weakness continued to pressurize higher-margin volumes of business-to-business. He also added that fewer shipments, and lower weights, in the company’s freight business, compressed results. In December, the transportation industry leader announced plans to spin-off its Freight division.
FedEx shares were down 12% from the beginning of the year to Thursday’s close, and 5% over the last 12 months. This was due in part to concerns that a price war could be triggered by the competition for market share between FedEx and United Parcel Service.
Below, we examine FedEx’s chart for the week and use technical analysis in order to identify important price levels that are worth monitoring.
Ascending Channel Breakdown
FedEx shares fell below the lower trendline in an 18-month ascending trend channel early February. The price continued to trend lower before the company’s earnings announcement.
The relative strength index (RSI), which is a measure of price momentum, continues to show a weak reading below 50.
Let’s identify the major support and resistance levels that investors may be watching on FedEx’s chart.
Major Support Levels Monitor
The first lower level that should be monitored is around $223. The shares could find some support in this area, near a line that connects the prominent October 2021 low with the countertrend highs of March 2022 and May 2023.
The bulls inability to defend the important level opens up the door for a fall to the psychological level $200. Bargain hunters can look for entry points near the swing low of May 2022.
Key Resistance Levels to Monitor
Investors should pay attention to the $267 level during stock upswings. This area, which is currently just below the ascending trendline’s lower line and 50-week moving average, may provide overhead support near a horizontal axis that links a range in price action on the chart going back to the swing high of January 2022.
FedEx’s shares could reach $300 again if there is a significant recovery. Investors that purchased the stock earlier may be looking for opportunities to profit near the series of peaks on the chart that formed between late 2020 and November.
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