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Package Shippers Suffer

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Package delivery companies were already suffering before last week's attacks, and two-days of service disruption and further uncertainty has UPS, FedEx, and Airborne Freight slumping.

Federal Express Point and Figure Chart

FedEx (FDX) reported Thursday that first quarter profits fell 36% due to declining demand attributed to a slowing economy. The express shipper said it will be extremely difficult to assess the financial impact going forward, and that volumes have not yet returned to normal.

Face with uncertainty, investors sell now and ask questions later, and FedEx stock has dropped $5 in four days. FDX is trading on a triple bottom sell signal, but has managed to stabilize at $34. The stock may be oversold and holding at support, but a cloudy financial outlook makes this stock too risky for bullish consideration.

UPS Point and Figure Chart

While United Parcel Service (UPS) is less dependent on air cargo for its deliveries, that hasn't stopped its stock from tumbling 9%. With the quintuple sell signal that was given this week, sellers are firmly in control and support levels are gone.

Airborne Express Point and Figure Chart

Airborne Express (ABF) obviously relies or air shipments, but the company was able to continue operations through an expanded trucking operation. Freight backlogs were cleaned up over the weekend, and the company is running normal operations. But their stock isn't back to normal after falling 28%. The one advantage ABF has over UPS is support at $8.50.

Jeffrey Canavan
Assistant Analyst

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