Tuesday, December 9, 2008

One Up, One Down

Two companies in the news today are FedEx Corp (symbol: FDX) and Texas Instruments (symbol: TXN). In both cases, profit warnings were issued and guidance was cut. But the market's reaction to the bad news was different for each stock. In early afternoon trading, FDX was down 15% and TXN was up 5%. One was up and one was down. So what gives?

Figure 1 is a monthly chart of FDX. FDX has made a round trip and now trades back to its 2003 break out point. FDX has already probed below these levels and is showing no signs of stabilizing. FDX should be an early cycle stock in that it should be a leader as the economy turns. For FDX, this is not a launching pad to a new bull market.

Figure 1. FDX/ monthly

Figure 2 is a monthly chart of TXN. The September, 2002 lows are being probed, and this seems like a good place for a bounce. I am not sure why TXN should be up and FDX be down when the news is similar. As we all know, the market has it ways. Maybe the technicals are offering some clarity.
Figure 2. TXN/ monthly

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