5 Trade Ideas for American Express: Bonus Idea

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

American Express, $AXP, fell from a February high to a low in March. It meandered from there for 2 months before starting to move higher. That move ended as it crossed the 200 day SMA in June and it pulled back. Since that top it has been consolidating in a symmetrical triangle. it broke down out of it last week, giving a target to 70, the March low. It has been stalling though as the price hits possible support from the July low.

The RSI is running along the oversold border in the bearish zone with the MACD dropping and negative. There is support lower at 89.50 and 85.80 then 82.25 and 80 before 76 and 73.50 then 69. Resistance above is at 93 and 95 then 97.80 and 100.50 before 105. Short interest is low at 1.1%. The stock pays a dividend with an annual yield of 1.89% and has been trading ex-dividend since October 8th. The company is expected to report earnings next January 22, 2021.

The November options chain shows largest open interest at the 95 and 110 puts with the call side showing largest at 110 then 120. In December open interest is biggest at 90 on the put side and spread from 100 to 120 on the call side. In January the open interest is biggest at the 80 and 95 puts but very large from 75 to 100. On the call side it is very large and focused at 110. In March, the first expiry to cover the next earnings report, it is just building but focused at the 90 put. On the call side it is biggest at 95 ad 100.

American Express, Ticker: $AXP

Trade Idea 1: Sell the stock short on a move under 89.50 with a stop at 93.

Trade Idea 2: Buy the November 87.50 Puts (~$2.75) on a move under 89.50.

Trade Idea 3: Buy the stock on a move over 93 with a stop at 90.

Trade Idea 4: Buy the December 95 Calls ($3.80) on a move over 93.

Trade Idea 5: Buy the January 90/95 strangle ($11.20) and sell the January 80/110 strangle ($3.50).

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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 ten months in the books, saw equity markets looking to start November sitting on support with downside momentum building into the election.

Elsewhere look for Gold to continue its pullback while Crude Oil may begin a new downtrend. The US Dollar Index continues to rise in consolidation while US Treasuries continue in their downtrend. The Shanghai Composite looks to continue to consolidate while Emerging Markets pullback in their uptrend.

The Volatility Index is spiking, putting a headwind against the equity markets. Their charts are all in downtrends on the shorter timeframe. On the longer timeframe both the QQQ and SPY sit on support and at risk of a break down. The IWM continues to lead, holding up the best of the three. 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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