Choosing the Right Credit Card (Stock)

• Posted by Greg Harmon
• on June 21st, 2011

We have all been to a restaurant or retailer where we got the counter and offered our credit card they pointed to a sign and said they only take certain cards, and not the one you offered. Having the right card becomes important. It is the same with the stocks of the credit card companies. The stock prices of the major credit card companies, American Express ($AXP), Discover Financial Services ($DFS), Mastercard ($MA) and Visa ($V) are starting to move higher again, but at different rates. So which one should you accept into your wallet? Let’s look at some charts.

Discover Financial Services, $DFS

Discover Financial fell lower from a channel at the end of May, finding support at the 100 day Simple Moving Average (SMA). After riding the 100 day SMA through the middle of eh Bollinger band it now looks to be heading higher. The Relative Strength Index (RSI) is trending higher and breaking the mid line and the Moving Average Convergence Divergence (MACD) indicator has crossed positive, both supporting more upside. If it can get over the 50 day SMA at 24.01 currently then it has resistance at 25 and 25.60 on the way to a Measured move (MM) higher at 26.50. This card stock looks the best.

American Express, $AXP

American Express had a strong run over its long term support/resistance line at 48 and the fell back to the 100 day SMA. Now back above the support/resistance line it is ready to move higher. The MACD is closing in on a cross higher and the RSI is trying to pierce the mid line. If it can get over 49.10 it has resistance at 50.50 and then 52 before a MM higher to 57. A good set up but may need a day or so.

Mastercard, $MA

Mastercard is building a base on support at 265. If it continues to hold then it has resistance higher at 275 and 285-287. The MACD is improving but still has a few days work to get to a cross and the RSI need to break the mid line to a higher high before it can convince that it is ready to rise. Keep watching it for now.

Visa, $V

Visa fell from a test of its resistance at 80.60 to a base at the 200 day SMA. But Monday it lost that base and fell lower. The MACD is improving but very slowly and the RSI is trending lower. This stock has a lot of work to do before you can consider it from the long side and under 73 it may be a good short.

Seems to be a pattern here. The longer the company name the better the chart looks. Hmmm, time for some more research.

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