Chart of the Day: American Express Shows Some Life
The big credit card company now has a solid low in place.
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Stocks in the credit-card sector have been performing well of late. Witness Visa (V) and Mastercard (MA), which both recently hit new all-time highs on stronger volume. Competitor American Express (AXP) is far from a new high but it has certainly gained some traction over the past few weeks.
We have not only seen improvement in Amex’s price action but also in the indicators, which tell us the correction is probably finished and higher prices are in store. The recent pullback from summer to early fall appears to now be a great buying opportunity to add more shares.
The heavy selling on Amex from the highs in July was intense. Lower highs, lower lows is our definition of a downtrend and that selling did not finish up until reaching the $300 level. At that point buyers started to nibble and sellers were not interested in distributing the stock, a good early sign of things. Now a series of higher highs, higher lows is on the chart. The candles are still pink, which means cautiously bearish but there is a good chance they turn bullish soon.
Earnings are out later in the week. Consumer spending has been strong, retail numbers robust last week and travelers continue to hit the road, all good signs for Amex price improvement, which is only about 13% off all-time highs. MACD is on a strong buy signal and money flow is back to positive.
We like American Express in TheStreet Pro Portfolio and rate it a One, or “buy at anytime.”
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At the time of publication, TheStreet Pro Portfolio was long AXP.
