4 Trade Ideas for American Express: Bonus Idea

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

American Express, $AXP, comes into the week rising up from a September low. It had exceeded the target lower after falling out of a rising wedge. The low was a 61.8% retracement of the last leg higher. Now it is back over the 200 day SMA. The RSI is on the edge of a move back into the bullish zone with the MACD rising but negative. There is resistance at 165.25 and 169.25 then 172 and 176 before 178.75. Support lower comes at 161.75 and 157.75. Short interest is low under 1%. The stock pays a dividend with an annual yield of 1.47% and has traded ex-dividend since July 6th.

The company is expected to report earnings next on October 19th. The October 6 Expiry options chain shows open interest light but spread from 155 to 170 on the call side and at 160 and 155 on the put side. The October monthly chain has biggest open interest at the 155 put and the 135 call. The November chain is just getting started with little open interest. The January chain has biggest open interest at the 150 put then it tails to 120. On the call side it is spread from 150 to 220.

American Express, Ticker: $AXP

Trade Idea 1: Buy the stock on a move over 164.50 with a stop at 161.50.

Trade Idea 2: Buy the stock on a move over 164.50 and add an October 165/155 Put Spread ($3.50) while selling the January 180 Call ($3.00).

Trade Idea 3: Buy the October/January 170 Call Calendar ($4.60) while selling the November 155 Put ($2.65).

Trade Idea 4: Buy the January 150/165/175 Call Spread Risk Reversal ($1.25).

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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 September quad witching options expiration in the books and heading into next week’s FOMC meeting, saw equity markets had a weak close out after holding firm.

Elsewhere look for Gold to continue to consolidate under 2000 while Crude Oil continues the trend higher. The US Dollar Index continues to drift to the upside toward a break out while US Treasuries trend lower. The Shanghai Composite looks to continue the trend lower while Emerging Markets continue in broad consolidation.

The Volatility Index looks to remain very low making the path easier for equity markets to the upside. The charts of the SPY and QQQ look strong on the longer timeframe, consolidating a trend move higher. On the shorter timeframe both the QQQ and SPY are showing a bit more weakness. The IWM just continues to motor along sideways in consolidation on both timeframes. 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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