Todays Big Stock: American Express Company Common (NYSE: AXP)

American Express Company is a global service company whose principal products and services are charge and credit payment card products and travel-related services offered to consumers and businesses around the world. American Express and its principal operating subsidiary, American Express Travel Related Services Company, Inc., are bank holding companies. It is engaged in businesses comprising four reportable operating segments: U.S. Card Services, International Card Services, Global Commercial Services, and Global Network & Merchant Services. Its range of products and services includes charge and credit card products, expense management products and services, consumer and business travel services, stored value products, network services, merchant acquisition and processing, point-of-sale, servicing and settlement, and marketing and information products and services for merchants, and fee services.

Before discussing potential trading opportunities with AXP (American Express Company), please review the 1 yr. chart of AXP that I have outlined below, with my added notations:

AXP has a long-standing support level at $42 (red) that was successfully tested again yesterday. Assuming AXP continues higher, $46 (purple) would be the first level of resistance, with $50 (blue) being the next level up. If AXP cannot hold $42, traders can expect the stock to head towards the 52-week low of $38.

The Tale of the Tape: AXP has a strong level of support at $42. A long trade could be entered at $42, or on a break above $46, with a stop placed below the level of entry. If you are bearish, short positions could be entered on a rally up to $46 or on a break below $42. Stops should be placed above the level of entry on any short positions.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key!

Good luck!
Christian Tharp, CMT