Federal Express July and August Straddles

Australian Colin Twiggs writes today about Fedex (FDX)



Twiggs says: " FDX failed to follow-through below $50 (after breaking support at $52), rallying strongly to test the upper border of a gently descending trend channel. Twiggs Money Flow (21-Day), however, continues to warn of selling pressure; and breakout below the channel would signal a test of primary support at $34. Upward breakout is now as likely and would indicate a primary advance with a target of $90; calculated as 62 + ( 62 - 34 ). "

With targets of either $34 or $90, this is another opportunity for straddles, where an investor profits with price movements either way.

A July 60 call sell for $0.50
A July 50 put sells for $0.50

Maximum move required for profit: 11.5%

August 60 call sells for $1.55
August 50 put sells for $1.50

Maximum move required for profit: 15.2%