Compression Breakout in FDX

[Steven Place]

The past 6 months have helped to give the stock a rest after a pretty strong run in 2013. It’s now starting to see some buying interest with volume behind it.

This makes sense– it’s a “boring” stock with a dividend, and that seems to be the theme with the markets right now with respect to what’s working.

I’d normally suggest call spreads but given the fact that the liquidity in the Jun contracts is garbage, a simple in the money call buy will do the trick.

Buy to open FDX Jun 135 call @4.60 or better.

Very, very aggressive stops for me at 134.74, which is a quarter underneath the recent double bottom put in earlier this month.

[Steven Place]

Very nice pop in FDX, we’re going to use this as an opportunity to take some risk off the table and get on the positive side of things.

Sell to open Jun 140 call for 3.15.

This moves our current breakeven from 137 to 131, and our opex breakeven from 139 to 136.

[Steven Place]

Turned out to be a great trade, but there’s only a small amount of profit left and we’ve got a little longer to expiration. Going to ring the register and take the profits.

[Author]

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