How To Trade FedEx Stock After Q1 Earnings Pop

FedEx Corp FDX bounced up 2.3% off Wednesday's closing price on Thursday after the company printed its first-quarter earnings.

On Sept. 16, FedEx cut its first-quarter guidance and withdrew its fiscal year 2023 projections, which rattled investors. The projection made the idea of a recession almost become a certainty and caused the stock to gap down about 22%.

FedEx said it expected first-quarter revenue to come in at approximately $23.2 billion and first-quarter adjusted earnings to be around $3.44 per share. 

For the first quarter, FedEx reported revenue of $23.2 billion, which missed the $24.01-billion consensus estimate. The company reported earnings per share of $3.44, slightly beating a consensus estimate of $3.35.

From a technical analysis perspective, FedEx’s stock still looks bearish following its earnings print, but is likely due for a short-term bounce. 

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The FedEx Chart: On Thursday afternoon, FedEx attempted to break up bullishly from a descending trendline the stock has been trading under since Sept. 19, but failed and was knocked back under the area. FedEx has been trading in the upper range of a lower gap that was left behind on July 1, 2020 for the last two trading days.

• Bullish traders may prefer to see the lower gap, which exists down to the $140.26 area filled before the stock reverses course because gaps fill 90% of the time. There are also upper gaps on FedEx’s chart, with the closest gap between the $165.35 and $203.22 range.
• If FedEx closes the trading day near the descending trendline, the stock will print an inverted hammer candlestick, which could indicate a bounce is on the horizon. If the stock rallies to close the day up near its high-of-day, a bullish engulfing candlestick will print, which makes a bounce even more likely.
• FedEx has resistance above at $165 and $172.71 and support below at $155.48 and $140.75.

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