FDO Technicals Could Spell Profits

by Jon Lewis  
Email This   Print Page  Tweet This Tweet This

Free Trading Guides

Family Dollar Stores (FDO) is an intriguing stock and a potential earnings play to kick off the season right.

The company is seemingly in the right retail space -- deep discounter -- where many consumers have settled to cope with the shaky economy.

But is that enough?

Recent data shows consumers are saving rather than spending. Unemployment rolls are expanding, albeit at a slower rate, and the jobless rate is marching toward 10% and beyond. And the granddaddy of all discounters -- Wal-Mart (WMT) -- is down 14% so far in 2009, trailing the broader market by a wide margin. What's up with that?

FDO is struggling on the chart. Although up for the year, the shares sit 20% below their April high. The one technical positive, though, is the 200-day moving average, which has solidly supported the stock for the past three weeks. That's a huge consideration for a potential trade.

More By This Expert

AIR Ready to Take Off After Earnings

Aerospace supplier and service provider AAR Corp. (AIR) looks poised for a major move higher after it announces earnings.

Should You Shop for Calls or Puts on Whole Foods?

Whole Foods Markets Inc. (WFMI) has a habit of making big moves after reporting earnings, and traders who take the right side of this bet could be handsomely rewarded.

Take a Gamble on This Earnings Play

Casinos have been a hot item lately, and gaming supply company Shuffle Master (SHFL) could pack a strong earnings punch next week.

2 Pre-Christmas Earning Plays

Next week should be a slow trading week, which means that stock prices could be more volatile than usual, especially if a company surprises or disappoints with earnings -- I have one of each for you.

Buy Calls on This Earnings Loser

This stock missed earnings estimates in three of the past four quarters, yet made double-digit gains in the weeks following. And it's about to announce earnings again.

Options Broker Center

Compare Brokers