Shipments are surging.
Shares of FedEx soared nearly 12% on Wednesday after a stronger-than-expected earnings report fueled by a pandemic-driven pickup in home deliveries. While Covid-19 shutdowns still ate into the company's profits, particularly those it gets from its more lucrative business-to-business clients, residential shipments made up for some of the pain.
The action marked FedEx's sixth-largest daily percentage gain ever.
"This is a company that doesn't have much room for error, but they've managed to figure it out," Gina Sanchez, founder and CEO of Chantico Global, told CNBC's "Trading Nation" on Wednesday. "This story of continued home deliveries is going to be a wind in their sails."
"However, that's not a story that you're going to see across the entire transport and logistics sector," she said. "There are parts of that sector that have been massively hit by that drop in commercial business-to-business shipments, and they're going to have a harder time catching up."
JC O'Hara, chief market technician at MKM Partners, agreed and said FedEx's chart is "still in a downtrend" from its 2018 all-time high of $274.66.
"We would actually like to look for charts within the transport area that are in an uptrend, and one group that really jumps out at us is the trucking industry," he said in the same "Trading Nation" interview.
Referring to a chart of the S&P 1500 Trucking Index, which tracks small-, mid- and large-cap trucking stocks, O'Hara flagged that it broke out of a two-year trading range several weeks ago.
"Now we have an area within transports that [is] breaking to new highs," he said, adding that its strength relative to the S&P 500 in the last year has been encouraging. "We believe trucking is the way to play the shipment and transportation theme."
Though the trucking index has cooled in recent weeks, O'Hara took the decline as a welcome reprieve for the group.
"We have [seen] 50-60% rallies in a lot of these names. That's a lot of momentum. So, let's take a breather here," he said. "It allows our technical indicators to reset out of overbought, and I think that reset is the perfect opportunity to add to a position or establish new positions."
Sanchez also sees catalysts in place that could help drive gains in the trucking stocks.
In addition to low fuel costs and stay-at-home delivery demand, "trucking is obviously the cheaper alternative to air freight," Sanchez said. "If we're going into a downturn as a result of people losing their jobs [and] people having to make decisions about ... their shipment options, they're going to go with the cheapest."
Beyond that, slower-than-expected reopenings should keep demand strong through the end of 2020, she said.
"There's definitely going to be a continued demand for home deliveries," she said. "The reopening, I think, given the surge, is going to go a lot slower than expected, which means that home delivery and ... residential demand will continue to be strong through the end of the year. So, I would say that that's going to bode well for anybody who's delivering any packages directly to homes."