Chart of the Day: A Dip in This Holding Is Another Buying Opportunity
The company is in the crosshairs of politics and the consumer, but the stock keeps chugging along.
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Recent comments by President Trump about lowering credit card interest rates for consumers has many worried about the future profits of names such as American Express (AXP) . We have to remember, though, this card is not like Mastercard (MA) and Visa (V) , and while you can carry a balance on some AMEX cards with "Pay over Time," most associate the card with balances paid off each month, that carry higher annual fees.
Hence, capping credit card interest rate fees is not something that will hurt AXP much, so any selling off that news would be a buying opportunity. We saw recent selling on this "trial balloon" and now a chance to buy the stock lower has finally arrived.
The chart looks great, but with the latest pullback that means the upward momentum has disappeared. Indicators are bearish, the MACD (moving average convergence divergence) recently rolled over and stochastics are down, but money flow remains slightly bullish.
The top of the chart shows a pullback to reliable support, the 100-day moving average. We should see an attempt to push back above soon, as the company reports earnings on Jan. 30.
We like American Express in TheStreet Pro Portfolio and rate it a Two, or "stockpile on pullbacks."
At the time of publication, TheStreet Pro Portfolio was long AXP.
