4 Trade Ideas for American Express: Bonus Idea

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

American Express, $AXP, went through a consolidation from late August through to mid December. but since then it has moved higher in steps. Each step has paused to digest the move and started again as it came in contact with the 20 day SMA. Last week was no exception as it started higher after a touch at the 20 day SMA Monday. It is now at resistance at the prior all-time high.

The Bollinger Bands® are opening to allow a move higher with the MACD crossing up and positive. The RSI is also turning back higher in the bullish zone. There is no resistance above 136.50. Support lower comes at 134.30 and 130.35 then 129.30 and 126.30. Short interest is low at 1%. The stock pays a dividend with an annual yield of 1.27% and it has been trading ex-dividend since January 10th. The company is expected to report earnings next on April 16th.

The February options chain shows the biggest open interest at the 130 and 129 strikes on the put side and the 130 call strike. In March the 130 strike on both sides is also the biggest open interest. The April options show large open interest on the put side from 110 to 135. But on the call side it is biggest from 125 to 140.

American Express, Ticker: $AXP

Trade Idea 1: Buy the stock on a move over 136.50 with a stop at 134.

Trade Idea 2: Buy the stock on a move over 136.50 and add a March 13 Expiry 134/130 Put Spread ($1.00) while selling the April 145 Call (95 cents).

Trade Idea 3: Buy the March/April 140 Call Calendar ($1.15) and sell the March 130 Put (95 cents).

Trade Idea 4: Buy the April 130/140 bull Risk Reversal (30 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 heading into the President’s Day holiday weekend, sees equity markets had another good week with strong moves to the upside.

Elsewhere look for Gold to continue to consolidate in an uptrend while Crude Oil reverses higher in consolidation. The US Dollar Index continues to move higher while US Treasuries consolidate in their uptrend. The Shanghai Composite looks to continue the short term move higher while Emerging Markets consolidate in a broad range.

The Volatility Index looks to remain very low making the path easier for equity markets to the upside. Their charts also look strong, especially on the longer timeframe. On the shorter timeframe both the QQQ and SPY remain strong while the IWM struggles to reach the prior high. 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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