Credit card giant American Express ( AXP) , and member of the Dow Jones Industrial Average (DJIA), looks like it could weaken further in the weeks ahead. Shares of the card company were cut to an equal-weight fundamental rating Tuesday by a sell side firm.
Let's check out the charts and indicators.
In this daily bar chart of AXP, below, we can see that prices made some fast and sharp up and down swings in February and March before starting a decline into late June. Prices have made only a slight bounce and are now showing us signs of bottoming. AXP is trading below the declining 50-day moving average line and below the declining 200-day line too. AXP was finding some buying interest (support) in the $155-$150 area but that was broken in June.
The On-Balance-Volume (OBV) line shows a decline from the middle of March telling us that traders of AXP are more aggressive sellers. The Moving Average Convergence Divergence (MACD) oscillator is below the zero line but trying to cross to a cover shorts buy signal.
In this weekly Japanese candlestick chart of AXP, below, we see a bearish picture. Prices have rolled over making a large top pattern from the middle of 2021. Prices have broken down below the declining 40-week moving average line. A "neckline" in the $155 area has been broken.
The weekly OBV line shows a sharp decline into June. The weekly MACD oscillator is in a bearish alignment below the zero line.
In this daily Point and Figure chart of AXP, below, we can see a potential downside price target in the $101 area.
In this weekly Point and Figure chart of AXP, below, a downside price target in the $109 area is being projected.
Bottom line strategy: The charts of AXP do not inspire confidence. Avoid the long side of AXP as further declines could unfold in the weeks ahead.
