DailyPlay – FedEx Corp (FDX) – December 28th, 2021

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The bullish DailyPlay for Tuesday, December 28th is FedEx Corp (FDX). FDX is part of the Industrials sector that has experienced a sharp rebound after declining to support at $100. Rotation into this sector has shown strong momentum.  

Please note this trade is a call diagonal trade which represents a longer-term bullish outlook. The aim for the short leg of the trade is to let it expire worthless or roll it closer to expiration for a minimal cost. This allows us to consistently receive income that offsets the premium paid for the long leg which eventually leads to a reduced cost basis and breakeven price. To learn more about Call Diagonals, please watch the recording below. 

Fundamental View

• FDX is significantly undervalued compared to the rest of the S&P 500 and is experiencing a strong improvement in free cash flow. 
• Still experiencing tailwinds from the pandemic which is expected to continue as e-commerce trends remain elevated  
• Earnings: Mar 17, 2022 (79 days)

Technical View

• Break above the $255 resistance level provides an excellent risk/reward bullish opportunity. 
• Bullish 1M trend.
• Strengthening Technical Score that is expected to improve further. 

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