FedEx (FDX) reports earnings after the closing bell this afternoon. The stock is up 15.5% year-to-date and set its post-election all-time intraday high of $219.99 on July 10. The stock is in bull market, territory 21.9% above its post-election low of $176.44 set on Nov. 9.
Analysts expect the package delivery giant to earn $3.17 a share. The stock is relatively expensive due to its P/E ratio of 19.4. FedEx offers a puny dividend of 0.93%.
Here’s how to trade the stock based upon its weekly chart and key technical levels.
The Weekly Chart for FedEx
Courtesy of MetaStock Xenith
The weekly chart for FedEx ($215.08 on Sept. 18) is positive with the stock above its five-week modified moving average (in red) at $211.64. The stock is well above its 200-week simple moving average or “reversion to the mean” (in green) at $166.40, last tested during the week of Feb. 26, 2016, when the average was $132.12.
The “reversion to the mean” is an investment theory that the price of a stock will eventually return to a longer-term simple moving average, and the 200-week is simple to track. A stock trading above its reversion to the mean will eventually decline back to it on weakness. Similarly, a ticker trading below its reversion to the mean will eventually rebound to it on strength.