FedEx Corporation (NYSE:FDX) has been grappling with a global trade slowdown

FedEx Corporation (NYSE:FDX) has been grappling with a global trade slowdown

FedEx Corporation (NYSE:FDX) has been grappling with a global trade slowdown

FedEx Corporation FDX has been grappling with a global trade slowdown and weakness in the European economy for a while now. The company’s third-quarter fiscal 2019 results bears testimony to this dismal scenario.

It report ed lower-than-expected earnings during the fiscal third quarter. Moreover, the bottom line declined 18.6% on a year-over-year basis due to a disappointing performance of the company’s major revenue generating segment, FedEx Express. Notably, this marks the company’s third straight quarter of an earnings miss.

Soft international revenues and a weak global trade are hampering the performance of FedEx Express segment. The company expects this situation to persist in the near future. 

Moreover, the sluggish global trade compelled the company to trim its earnings per share outlook for fiscal 2019 for the second time during third-quarter fiscal 2019 earnings release. Previously, the company slashed its earnings forecast in December 2018. 

FedEx now anticipates fiscal 2019 earnings per share in the range of $15.10-$15.90 excluding pension adjustments, TNT Express integration expenses and certain other items (prior view was in the $15.50-$16.60 range). 

Apart from the above factors, high costs are hurting the company’s growth. With FedEx investing significantly in facility upgrades at its key divisions, capital expenses are on an upswing. Capital expenses are expected to be $5.6 billion for fiscal 2019. Additionally, integration expenses pertaining to TNT Express are pushing up costs. FedEx anticipates TNT Express integration charges to be more than $1.5 billion through fiscal 2021. Of these costs, approximately $435 million are estimated to be incurred in fiscal 2019. 

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 181.23.

The projected upper bound is: 182.96.

The projected lower bound is: 167.50.

The projected closing price is: 175.23.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 30.3189. This is not an overbought or oversold reading. The last signal was a sell 5 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 45.82. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 55 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -51. This is not a topping or bottoming area. The last signal was a buy 3 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 2 period(s) ago.

Rex Takasugi – TD Profile

FEDEX CORP closed up 3.080 at 175.150. Volume was 37% below average (neutral) and Bollinger Bands were 56% narrower than normal.

Open High Low Close Volume___
173.010 175.210 172.500 175.150 333,287

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 177.57 178.31 214.10
Volatility: 37 28 37
Volume: 610,075 451,858 445,593

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

FEDEX CORP is currently 18.2% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of FDX.N at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on FDX.N and have had this outlook for the last 19 periods.

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