Trade Idea- FDX (Short)

I'd like to see a few things happen before just jumping in the trade, of course the tone of the overall market at the close will be important and whether the market produces a failed breakout from yesterday as previously discussed. FDX has the same issue.

 The point of a false breakout is to trap longs, longs need a reason to buy and the technical reasons are pretty easy to identify, such as a break of an important resistance level, FDX did so yesterday. Another would be posting a new breakout high, yesterday FDX also did that, not only at the Feb. high, but since the March 2009 rally started. What needs to happen to make FDX an interesting short at this point is to break support at the red trendline, the more convincing the break, the better.

 While I don't use MoneyStream a lot, I think it's a solid indicator when it does give a signal and here we see a substantially lower MS reading at the breakout, then at the Feb. high.

 The hourly trend channel has done a good job of holding the trend, the channel being broken to the downside and the channel turning down would be a strong indication as well.

 The 30-min 50 bar sma has also held the trend well and a break of this average would be in line with a break of the trend channel as well as support.

You can see volume has been decent lately, especially above the former resistance level. This is part of last night's Price/Volume relationship, which clearly showed the longs came out. The resistance levels identified as needing to be broken to the upside to entice longs back in the market were right on, thus the dominant price volume relationship last night. One trade that I would consider would be a break of support at the red trendline, especially if the market does the same today , I'd probably keep a fairly tight stop just above today's highs. You could opt for a wider stop above yesterday's breakout highs as well, you'll have to decide on that when looking at your position sizing and whether there's a convincing break.