Mike Khouw And Carter Worth Are Bearish On FedEx Corporation (FDX)

Carter Worth analyzed, on CNBC's Options Action, FedEx Corporation's FDX chart, and his analysis showed that a bearish pattern is forming. He was looking at a daily closing price in the last two years, and he concluded that the stock has tripled from the March lows. He spotted a head and shoulders pattern that happened after the stock tripled. The first shoulder was formed in the last month of 2009. He also analyzed the 20 year chart, and showed that the uptrend is broken, and the trend line became a resistance that FDX failed to break. Carter Worth also compared the price per share with the earnings per share, and concluded that the share price is ahead of itself. Mike Khouw commented that investors are bullish on FedEx Corporation (FDX), and their expectations are pretty high. FedEx (FDX) is reporting earnings next week, and if it disappoints we could see some downside. Mike Khouw thinks that the best way to trade FedEx (FDX) is to sell an in the money call spread. He wants to sell the October 80 call for $6.20, and buy the October 90 call for $1.20. He will generate $5.00 with this trade. Mike Khouw added that the important thing to remember is that when you are selling or buying a vertical spread the most that you can earn is the difference between the two strikes. FedEx (FDX) fell 0.14% on Friday, and closed at $84.16.