FedEx Stock Takes a Breather Ahead of Quarterly Earnings

The options pits have been much more bullish than usual

Digital Content Manager
Dec 13, 2021 at 1:57 PM
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The shares of FedEx Corporation (NYSE:FDX) are down 2% at $242.10 at last check, ahead of the company's fiscal second-quarter earnings call, due out after the close on Thursday, Dec. 16. The last time we checked on FDX, call traders were blasting the shipping giant. Below, we will further explore the equity's technical setup, as well as some of its previous post-earnings activity, to determine where it may be headed next.

FedEx stock had been on a downward spiral since its May 27, all-time high of $319.90. While the shares have since recovered some of those losses, and  bounced off the $227 level earlier this month, the equity is now running into overhead pressure at the $248 mark. Longer term, FDX carries a 16.5% year-over-year deficit. 

FDX

The security has a history of mixed post-earnings reactions, finishing four of eight next-day sessions higher in the last two years, while the other half were lower. However, it did log an 11.7% pop in July 2020. Options traders are pricing in a 9.2% swing for FDX this time around, which is bigger than the 7.1% move it averaged after its last eight reports, regardless of direction.

The brokerage bunch is already optimistic towards FedEx stock. Of the 16 analysts in coverage, 12 sport a "strong buy" rating, while four carry a "hold." Plus, the 12-month consensus target price of $302.41 is a 25.1% premium to the security's current perch.

Call traders echo that optimism. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), FDX's 50-day call/put volume ratio of 3.41 stands higher than all other annual readings. This means long calls have been getting picked up at much faster-than-usual pace over the past two months.

It is also worth noting the equity's Schaeffer's Volatility Scorecard (SVS) sits at 82 out of 100. This suggests FDX has exceeded options traders' volatility expectations during the past year.

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