Chart of the Day: We're Still Giving American Express Some Credit
Strong earnings last week sent a bullish signal but bearish market conditions are still weighing on this card company.
You're reading 0 of 1 free page.
Register to read more or Unlock Pro — 50% Off Ends Soon
We saw optimism from the American Express AXP earnings report last week but still cut our price target on the name, preferring to be a bit more conservative about the future. With so much uncertainty about tariffs, rates, the dollar, strong potential for recession and other macro concerns it was prudent to make this move last week. Yet, we still believe the heavy moat around AXP -- with its glamorous card features and popular travel offerings -- there is a great chance that this company comes out on top if the economy continues to grow or even pulls back a bit.
The chart is not showing bullish optimism, with a downtrend channel of lower-highs, lower-lows -- our textbook definition of a downtrend. The Average Directional Index (in the third pane) is telling us the power of the trend is weakening; it is clearly a downtrend, though, and there is a chance this reverses up.
But then again, the ADX seems to imply the big volatility is subsiding and we are headed for a period of base-building. Money flow is bearish, but the Moving Average Convergence Divergence just crossed for a bullish signal -- that is encouraging. Candles are purple or pink, which is bearish on the GoNoGo composite of indicators, so there is more selling until the intensity wanes.
We like AXP for the long term and rate it a one in Pro Portfolio, buy at anytime.
The Pro Portfolio is long AXP.
