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Here's the key level to watch in FedEx as shipping giant prepares to report earnings

Options traders bet on FedEx to flunk earnings test

FedEx's earnings report on Tuesday afternoon could mean major moves for its stock.

The options market is implying a 5% move in either direction for shares of the shipping giant following its earnings report after the closing bell.

That implied swing doesn't seem unusual for FedEx, which has moved 6% on average after its last four earnings reports. But this time, there's a key support level in play that could make for an especially risk-averse trade.

"All four times over the last year, this stock has declined the next day" after earnings, Dan Nathan, co-founder and editor of RiskReversal.com, said Monday on CNBC's "Options Action." "This stock has been a sale on rallies, but it does find buyers because of that fine management and that cheap valuation."

This time brought about some bearish bets. When FedEx's stock was above the $161 level on Monday, several traders bought $160/$150 put spreads expiring on June 28 for $3 each, betting that FedEx's shares would decline to about $150.

That would be roughly in line with the options market's implied move for FedEx, but there's another, more interesting reason why the $150 level is so critical for this stock, said Nathan, who also appears regularly as a trader on CNBC's "Fast Money."

"One hundred fifty dollars could be a very important level," Nathan said, pointing to FedEx's one-year stock chart. "This is the December low just above $150. Last month, it kind of bottomed out just about $150. Now it's kind of turning lower as we head into earnings."

Now, having lost nearly 33% in the last 12 months, FedEx is back at its recurring floor of support of $150, the trader said.

"It's right at that trendline," he said. "I would say $150 is a very, very important level. I'd just make one point: I think expectations are very low, so this company does not have to put up a big number for it to find some support down in the $150s."

FedEx shares lost 2.4% in Tuesday morning trading. The stock is up more than 2% this month, but still struggling to make year-to-date gains.