Skip to main content

American Express Co. (AXP) – Consolidating for Potential Breakout


American Express Co. (AXP) – Consolidating for Potential Breakout

The chart of American Express Co. (AXP) highlights a potential breakout scenario, drawing attention to traders seeking strong risk-reward setups. Below is a detailed analysis of the stock’s price action and technical indicators to inform your trading decisions.

Market Structure and Price Action
AXP has been consolidating just below the USD 308.00 resistance level, forming a tight trading range. This pattern suggests a possible accumulation phase, with market participants preparing for the next significant price move. The range-bound nature of the stock offers a clear breakout level that, once breached, could trigger upward momentum.

Technical Indicators

  1. Relative Strength Index (RSI): The RSI currently stands at 10.37, showing that the stock is outperforming the broader S&P 500 index. This relative strength aligns with bullish sentiment and points toward the possibility of continued upward momentum.

  2. FFI Indicator: The FFI indicator remains subdued during recent periods of selling. This indicates that selling pressure is limited, supporting the likelihood of a bullish breakout when volume increases.

Key Levels to Watch

  • Breakout Level: USD308.00
    A breakout above this level would signal a strong bullish move. Watch for confirmation through increased volume and sustained price action above this resistance.

  • Support Level/Stop-Loss: USD286.35
    If the price drops below this level, it would invalidate the bullish thesis. This acts as a key stop-loss level for risk management.

  • Target Levels:

    • 1st Target: USD329.65
    • 2nd Target: USD351.30

    These levels are derived from previous resistance zones and Fibonacci extensions, representing logical areas for profit-taking.

Trade Setup

  • Entry Point: Enter on a confirmed breakout above USD308.00, supported by increased volume and strong price action.
  • Stop-Loss: Place a stop-loss below USD286.35 to protect against downside risk.
  • Targets: Consider taking partial profits at USD329.65 and exiting fully at USD 351.30 to maximize returns.

Conclusion

American Express Co. (AXP) is setting up for a potential breakout above its critical resistance level at USD 308.00. With strong relative strength and subdued selling pressure, the stock has the foundation for a bullish move. Traders should monitor the stock closely for volume confirmation at the breakout and adhere to stop-loss levels to manage risk effectively.

Disclaimer: This analysis is for informational purposes only and does not constitute financial advice. Always conduct your own research and consult a financial advisor before making trading decisions.

Most Popular

BYD Co (1211:HK) Witnessing Signs of Strength

BYD Co (1211:HK) Witnessing Signs of Strength On Friday, we observed strong buying within a wide trading range, with the stock closing near the day’s high and good volume recorded. The previous two days of selling showed relatively low volume, indicating potential supply exhaustion. The stock price is currently at a key resistance level, constrained by a downward trendline and a horizontal support-turned-resistance line. A breakout above this level could signal a potential trend reversal , with an initial technical price target of HK$300.00. The stock is outperforming the broader market, indicating strong market demand, as evidenced by our proprietary Relative Strength Indicator (RSI), which is above zero. Additionally, the volume momentum indicator (FFI) is improving, further supporting the possibility of supply exhaustion. The Stochastic indicator also continues to trend higher, reinforcing a bullish outlook. A stop-loss price is set below HK$248.40 . If the price falls below this l...
Read more

Week Ahead: Trump Trade and the Resilient US Economy

  Week Ahead, 9 Dec 2024 Macro News: U.S. markets continued their record-breaking streak this week following a reassuring speech by U.S. Federal Reserve Chair Jerome Powell, highlighting Fed's cautious yet comfortable stance on rate cuts. Beneficiaries of the "Trump Trade" also saw significant gains, with Tesla Inc. rising by +12.77% and Bitcoin up +2.24% for the week. The U.S. technology sector, represented by the QQQ ETF, also performed strongly, boosted by Friday's jobs report, which indicated a resilient economy. Meanwhile, the Hang Seng Index (2800 ETF) experienced a technical turnaround, gaining +2.28% this week. The rally was fuelled by speculation that Beijing might introduce additional lending and mortgage rate cuts to stimulate the economy. Medium Term: • S&P 500 (SPX): Index remains above the 6,000 level and could trend towards the 6,180 zone. • Straits Times Index (STI): STI reversed near our 3,860 resistance zone. We are neutral and is looking out for...
Read more

Week Ahead: Sustaining December’s Investor-Friendly Momentum

  Week Ahead, 2 Dec 2024   Macro News: Despite inflation remaining firm, the market continues to expect that the US Federal Reserve has a higher probability of cutting rates by 25 basis points at the upcoming FOMC meeting . December marks the final month of 2024 as we approach the year's end. Historically, the S&P 500 Index has been favorable to investors in December , with a 70.83% probability of a positive return and an average gain of 0.74%. We hope these trends persist in 2024. Currently, we have not identified any trade setups. We will provide updates if any opportunities arise. Medium Term: ·        S&P 500: The S&P 500 remains above the 6,000 level and could trend towards the 6,180 zone. ·        STI: The STI remains at the 3,700 resistance zone, with no major technical signals observed. If momentum sustains, the index could move towards the 3,860 level. ·     ...
Read more