Shipping giant FedEx Corporation (NYSE:FDX) is trading 1.3% higher at $159.46 today, a rarity for the stock, as its long-term performance has a grim history. The stock has shed 35% over the past 12 months, touched a three-year bottom of $147.82 on Wednesday, and is now seeing pressure from a historically bearish trendline. Below, we will explore data from Schaeffer's Senior Quantitative Analyst Rocky White that reveals why FedEx stock may be eyeing its next leg lower.
Specifically, the security just rose to within one standard deviation of its 70-day moving average, after a lengthy stretch below the trendline. This signal has flashed four times in the past few years, per White, resulting in an average 15-day loss of 10.9%, with not a single one of the returns positive. A similar plunge would put FDX back near $142 -- a more than three-year low.
Call buying has been a favorite of options traders. Data from the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows FDX with a 50-day call/put volume ratio of 1.65, which ranks in the 75th annual percentile. This indicates nearly two calls have been purchased for every put during the last two weeks on the equity, leaving plenty of room for put traders to enter the ring.
Analyst downgrades are also looking inevitable on the shipping stock. Ten of 17 brokerage firms sport a "buy" or better rating on FDX, while its average 12-month price target of $187.84 is sporting an almost 17.95% premium to current trading levels.