SIA Chartsâ Relative Strength rankings not only help investors to identify which stocks in a universe are outperforming and underperforming against their peers, but also when relative performance trends are changing.
Courier company FedEx (FDX) fell down the relative strength rankings of the SIA S&P 100 Index Report in the latter part of 2023, falling out of the green zone and dropping down into the red zone. FedEx then spent the first half of this year bouncing around the border of the yellow and red zones.
The shares have rallied since the companyâs latest earnings report exceeded expectations. FDX has returned to the Green Favored Zone finishing Friday in 21st place, up 36 spots in the last month. Over that time, the shares are up 19.2%, while the S&P 100 Index is up 5.7%.
About a year ago, FedEx (FDX) completed a bullish Ascending Triangle base with a breakout over $230.00. Since then, the shares have remained under accumulation, advancing in a Rising Channel of higher highs and higher lows. Accumulation accelerated in late June enabling the shares to break out over $290.00 on a spike in volume.
Currently, the shares are retesting their mid-2021 peak. A close above the $300.00 round number would confirm the start of a new advance with next potential resistance near $320.00, then $350.00 based on measured moved. Initial support appears near the $290.00 breakout point.
Comparing the point and figure chart for FedEx (FDX) to the relative strength chart shows that sometimes stocks underperform because they go down and sometimes they underperform because they are going up but not as fast at the market. This is a particularly important consideration in times like now when gains are concentrated in a small number of stocks.
A downtrend in FedEx shares bottomed out in October of 2022. Following an initial rally that broke the downtrend, FedEx settled into a Rising Channel of higher lows and higher highs from August to June, a sign of steady underlying accumulation.
Last week, FedEx completed a bullish Double Top pattern, reached its highest level in three years, and is currently testing its June 2021 high. A close above the $300.00 round number would signal the start of a new advance where next potential resistance may emerge in the $338.20 to $351.90 zone, based on a cluster of vertical and horizontal counts. Initial support appears near $277.45 based on a 3-box reversal.
With a perfect SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) of 10 out of 10, FED is exhibiting short-term strength across the asset classes.
Disclaimer: SIACharts Inc. specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investors investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIACharts Inc. nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.
