As FedEx rallies, another part of the transports is next to break out, chart anlayst says $FDX (via TradingNation)
shutdowns still ate into the company's profits, particularly those it gets from its more lucrative business-to-business clients, residential shipments made up for some of the pain."This is a company that doesn't have much room for error, but they've managed to figure it out," Gina Sanchez, founder and CEO of Chantico Global, told CNBC'son Wednesday. "This story of continued home deliveries is going to be a wind in their sails.
JC O'Hara, chief market technician at MKM Partners, agreed and said FedEx's chart is "still in a downtrend" from its 2018 all-time high of $274.66. "Now we have an area within transports that [is] breaking to new highs," he said, adding that its strength relative to thein the last year has been encouraging. "We believe trucking is the way to play the shipment and transportation theme."
"We have [seen] 50-60% rallies in a lot of these names. That's a lot of momentum. So, let's take a breather here," he said. "It allows our technical indicators to reset out of overbought, and I think that reset is the perfect opportunity to add to a position or establish new positions."In addition to low fuel costs and stay-at-home delivery demand, "trucking is obviously the cheaper alternative to air freight," Sanchez said.
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