4 Trade Ideas for American Express: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

American Express, $AXP, started higher in December and stalled as it hit the prior high. After a minor pullback it continued to the upside making a higher high and then retested the break out. It then advanced further to a top in July. Since then it has been pulling back and last week dropped through the 200 day SMA, retracing just over 38.2% of the full move higher. The last 3 days it printed a Morning Star reversal pattern and closed back at that prior resistance.

The RSI turned back up as well out of oversold territory, with the MACD leveling after a pullback. There is resistance now at 114.50 and 116.50 then 119.50 and 121.75 before 123.40 and 126.50 then the top at 129.40. Support lower comes at 112 and 109.40 then 106.50. Short interest is low under 1%. The company is expected to report earnings next on October 18th before the market opens. The stock pays a dividend with an annual yield of 1.50% and started trading ex-dividend October 3rd.

The October options chain show the largest open interest at 110 and 115 on the put side. It is bigger at 115 and 120 on the call side. The at-the-money straddle suggest a $4.50 move by expiry. November options have highest open interest at the 75 and 80 put strikes and then the 120 and 125 calls. January options open interest peaks at the 90 and 95 puts, but the 125 calls.

American Express, Ticker: $AXP

Trade Idea 1: Buy the stock on a move over 114.50 with a stop at 112.

Trade Idea 2: Buy the stock on a move over 114.50 and add an October 112/110 Put Spread (53 cents) while selling the November 8 Expiry 122 Call (60 cents).

Trade Idea 3: Buy the October/November 120 Call Calendar (90 cents) and sell the October 110 Put (88 cents).

Trade Idea 4: Buy the November 105/120/125 Call Spread Risk Reversal (4 cents).

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After reviewing over 1,000 charts, I have found some good setups for the week.  These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which with the 3rd Quarter in the books saw equity markets with a rocky start to October but a strong finish on the week.

Elsewhere look for Gold to consolidate around 1500 while Crude Oil bounces in the downtrend. The US Dollar Index continues the drift to the upside while US Treasuries drive back towards their all-time highs. The Shanghai Composite looks to come back from holiday biased lower and Emerging Markets have reversed to the upside in the short term.

A Volatility spike has eased and looks to continue lower, shifting the bias to higher for the equity index ETF’s SPY, IWM and QQQ. The SPY and QQQ reversed drops to close with strong momentum over support while the IWM held and bounced at the bottom of its wide consolidation range. Use this information as you prepare for the coming week and trad’em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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