DailyPlay – Opening Trade (FDX) – March 21, 2024

FDX Bullish Opening Trade Signal

Investment Rationale

FDX reports earnings after the close today and presents an opportunity to add long exposure going into the event. With recent shipping outlooks improving across the board, FDX’s recent underperformance provides a rare opportunity to add FDX to your portfolio before the event. Options provide us the ability to capture potential upside with limited risk. 

Technical Analysis

FDX has traded between $235 and $250 after breaking down on last quarter’s disappointing earnings. But over the past few days there are signs that the consolidation range is starting to breakout higher with decent volume. Couple this with relative outperformance to the overall market, sets up for a potential breakout confirmation with earnings as a catalyst after the close today. 

FDX – Daily

Fundamental Analysis

DX trades at only 11x forward earnings while analysts expect about 11% EPS growth for next year. That is a fair bit higher than the rest of the market despite trading at a 50% discount to the S&P 500. If we hear a positive outlook for 2024 on earnings tomorrow, that could unlock significant value for investors. 

Trade Details

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish Debit Spread

Details: Buy to Open 3 Contracts April 19th $260/$275 Call Vertical Spreads @ $5.93 Debit.

Total Risk: This trade has a max risk of $1,779(3 Contracts x $593) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $593 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that recently broke higher from an area of support.

1M/6M Trends: Bullish/Bullish

Relative Strength: 6/10

OptionsPlay Score: 99

Stop Loss: @ $2.97 Credit. (50% loss of premium paid)

View FDX Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

Please note that these prices are based on Wednesday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View FDX Trade