Chart of the Day: A Rest Before a Move Higher?
The stock is building a strong base at a higher level.
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Following some strong earnings around the travel space we have seen American Express AXP continue to move higher. However, we notice the stock is currently trending sideways, perfect for a stock that recently reached an overbought state. Stocks need to take a rest from time to time after pushing to new highs like American Express did in late January.
How long might a consolidation last? Well, for a stock in a strong uptrend maybe three to six weeks before the next move gets underway. Looking to the indicators, we see the MACD (moving average convergence/divergence) is bearish but only because the moving averages have stopped moving higher (obvious with AXP moving sideways).
Money flow (bottom pane) remains robust as big money continues to plow funds into this big credit card firm. Momentum has waned here, with the price action, according to the ADX (pane 3), oversold and looking ready to turn higher.
We like American Express in TheStreet Pro Portfolio and rate it a Two, or "stockpile on pullbacks."
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At the time of publication, TheStreet Pro Portfolio was long AXP.
