20 Years of FedEx

Recently I have been studying ultra-long-term charts - with anywhere from 5 to 40 years of data. Here's a 20 year, monthly chart of FedEx (FDX). I've noticed that all of the patterns found on shorter term charts (daily and intraday) can also be found on these monthly charts.

As the chart shows, FDX has been trending higher since 1990. Although the trend is clearly up, there were many periods along the way, some as long as 4 years, where FDX churned sideways without making any new highs. Imagine the incredible patience required to hold a stock for 4 years without even one new high. FDX has gone from $10 to $100 over roughly 17 years. That's a CAGR of about 14% - not too shabby. Those with patience have been adequately compensated.

So what's the trade? You'll notice FCX has found support at the orange trendline for the past three months. If you look back in time, you'll also notice that every single time the stock has touched the orange trendline has been a great time to buy. Also, FDX traded huge volume in January, which could be a marker of the bottom.

THE GAMEPLAN:

Buy some FDX. If it drops below the March low ($82.50), get out. That's a 12% drop from the current price, so size your position accordingly. Otherwise we'll just stay on the train, or the truck, rather, and enjoy the 14% CAGR.