Did you miss the deep discount Fedex delivered

• Posted by Greg Harmon
• on August 24th, 2015

Fedex delivered a deep discount to your door this morning. At its low point the stock was down almost 17% below Friday’s close. If you were lucky enough to grab some stock just above 130 congratulations. In fact there were many stocks that reacted like this, down 15% or more and recovered quickly. But if you missed it don’t worry. Fedex leaves those nice stickers on your door telling you they will be back tomorrow.

The chart of the stock may tell you the same thing, but not quite as explicitly. The candlestick that will print today is called a Hammer. It is noted for its long lower shadow following the open, that recovered and closed near the open and near the high of the day. It is a signal of exhaustive selling as sellers took control to drive the price down to 130 but buyers then overwhelmed them and drove the price back higher.

These candlesticks suggest a reversal, but need to be confirmed by a higher close Tuesday. Hence Fedex may be back around to give you a buying opportunity Tuesday. The other aspects of the chart can also be interpreted as ripe for a turn around. The price has fallen far outside of the Bollinger Bands®, often a place where it snaps higher. Also the RSI is oversold and could bring in some oversold buyers looking for a bounce.

If you bought at the low certainly protect your gains today, but if you missed it, look for these signs in Fedex (and the other stocks like this) to confirm a reversal Tuesday.

Get my ebook, Markets for 2015 and Beyond, a long term forecast with all proceeds going to charity.

Want to learn more about Dragonfly Capital Views?
Dragonfly Capital Views Performance Through July 2015 Expiry and sign up here

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

blog comments powered by Disqus