American Express Catches a Fresh Bid, Shooting for New Highs Soon

 | Feb 26, 2018 | 2:45 PM EST
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Stock quotes in this article:

axp

"If you aren't willing to own a stock for ten years, don't even think about owning it for ten minutes. Put together a portfolio of companies whose aggregate earnings march upward over the years, and so also will the portfolio's market value."

- Warren Buffett

American Express Co. (AXP) is perhaps the sixth largest holding in Warren Buffett's portfolio. We reviewed the charts and indicators on AXP last week and suggested, "Traders and investors long AXP from lower levels should consider raising sell-stop protection to a close below $91 or even tighter if you wish. A close below $89, a new low close, would prompt a test of next support around $85." The chart of AXP has continued to strengthen Friday and today so let's see what has changed.

In this daily bar chart of AXP, below, we can see how prices have crossed above the flat 50-day moving average line and are now close to making new highs. The daily On-Balance-Volume (OBV) line has strengthened signaling that buyers of AXP have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator has improved and could cross above the zero line for an outright go long signal.

In this weekly bar chart of AXP, below, we can see that prices successfully tested the rising 40-week moving average line. The weekly OBV line has weakened the past four or five weeks and this is a concern. The weekly MACD oscillator is in a bearish mode after giving a take profits sell signal.

This Point and Figure chart of AXP, below, has strengthened since last week. Prices are close to a new high and upside breakout and we can see a potential $124.60 price target.

Bottom line: It looks like AXP wants to resume its uptrend. Sell stops might be raised by traders to $95. $105 and $125 are the potential upside price targets if AXP breaks out to a new high. Warren will be pleased.

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