The shares of FedEx Corp (FDX) have cooled off after adding 12.3% in December alone. FDX — last seen trading at $253.92 — is down 2.1% since the start of the year. However, this recent pullback has FDX running into a historically bullish trendline on the charts, that, if past is precedent, could help the stock regain its late-2021 mojo.
FedEx stock is within one standard deviation of its 40-day moving average. According to data from Schaeffer’s Senior Quantitative Analyst Rocky White, four similar signals have occurred during the past three years. FDX was higher one month later 67% of the time, averaging a one-month return of 6%. A similar move, from FDX’s current perch would put the stock above $268 and right where the shares’ rally ran out of steam last month.
Despite calls outnumbering puts on an absolute basis, the stock’s 10-day put/call volume ratio of 0.72 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is in the elevated 90th percentile of its annual range. In other words, this suggests a very healthy appetite for long puts of late, and an unwinding of this pessimism could also give FDX a boost.
Plus, now could be a good time to weigh in on FedEx stock with options. The stock’s Schaeffer’s Volatility Index (SVI) of 26% stands higher than just 14% of all other readings in its annual range, implying that options players are pricing in relatively low volatility expectations at the moment.