FedEx Corporation FDX saw an uptick in trading on Monday after experiencing a near 6.5% decline on Friday.

The delivery giant released earnings that did not meet Wall Street’s expectations, sparking initial concerns. However, the situation may not be as bleak as perceived. After starting the day near its lowest point on Friday, FedEx shares rebounded by more than 4.5% by market close. This notable recovery makes it our Stock of the Day.

In trading, the term ‘action’ refers to a stock’s behavior, an intangible quality that reflects market sentiment. For instance, if a company releases earnings exceeding forecasts but the stock declines, it suggests negative action, indicating that more investors are looking to sell rather than buy.

Conversely, if a company reports disappointing earnings but the stock rallies, it exemplifies positive action. This implies that, despite poor earnings, buyer interest outweighs seller interest.

The trading pattern in FedEx on Friday indicates positive action. The stock opened near the day’s lows but ended up recovering significantly. This resilience suggests that many investors reassessed the earnings report and concluded it wasn’t as bad as first thought.

Should the stock approach the $242 level again, it may face considerable resistance. This price point served as support back in June 2024 and has also been a support level earlier in the current month.

Investors who purchased shares around $242 may be second-guessing their decisions, as they are now facing losses. These regretful buyers could initiate sell orders if the price retraces to their entry point.

If a substantial number of these sell orders emerge, they would create resistance at a price that previously held support. This scenario could ultimately halt any upward movement in FedEx’s stock.

Read Next:

Image: Shutterstock