Will FedEx Corporation (FDX) Deliver Another November Rally?

Data suggests delivery stock FedEx Corporation (NYSE:FDX) could be set for another big November

Josh Selway
Nov 1, 2016 at 2:14 PM
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With help from Schaeffer's Senior Quantitative Analyst Rocky White, we've been sifting through historical returns for stocks in November. Earlier, we took a look at two bank stocks that have historically struggled during the month. Now, let's take a more positive spin and examine stocks that have typically outperformed in November. Based on the data, one stock that stood out was delivery specialist FedEx Corporation (NYSE:FDX)

First of all, FDX stock has finished higher in eight of the past 10 Novembers, per the chart immediately below. What's more, the stock sports an average single-month return of 3.7%.

Best November stocks Nov 1

With this in mind, the shares' already strong technical setup looks that much more promising. Specifically, FDX is almost 15% higher in 2016 at $170.84. Also, a recent pullback has been contained by the $169-$170 level -- corresponding with the stock's April and August highs, the opening price of its late-September post-earnings bull gap, and the rising 50-day moving average. 

Daily FDX chart Nov 1

What's also notable about FedEx stock is that it has seen a huge influx in short interest in recent months. Since early May, this figure has increased by 60%, and now more than three days' worth of buying power is controlled by short sellers, based on average daily volumes. A quick exit from these bearish traders would provide an extra boost for FDX shares. 

It's also interesting to note that short-term options traders have taken an unusually put-focused stance toward the stock. The Schaeffer's put/call open interest ratio (SOIR) for FDX currently stands at 1.82, revealing put open interest among options expiring within three months nearly doubles call open interest. More telling still, this SOIR tops three-fourths of readings from the past year, suggesting FDX could get a lift as these seemingly bearish positions unwind. 

Finally, one of the most attractive aspects of FedEx Corporation (NYSE:FDX) options at the moment is the fact that the stock's Schaeffer's Volatility Scorecard (SVS) comes in at a sky-high 99 -- suggesting the options market has regularly underestimated the stock's ability to make outsized moves in the past year. What's more, FDX's Schaeffer's Volatility Index (SVI) of 20% ranks below 76% of comparable marks from the past year, hinting at unusually low volatility expectations. 

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