Bank holding company American Express (AXP) is more than just your typical banking stock. The $63 billion firm is best known for its payment card network, and a spend-centric business model that's made some investors nervous that a slump in consumer spending could derail share prices.
But the technicals are saying "buy" right now.
American Express has been trading in an uptrending channel for the better part of the last year, bouncing in between parallel support and resistance levels all the way up. A channel is helpful for traders because it gives us a good way to gauge an optimal entry and exit in AXP -- you want to buy at support and sell as shares approach resistance higher up.>>7 Defensive Bank Stock Plays From FBR Shares of AXP slammed into support earlier this month, bouncing slightly higher to where they are now in the $55 range. That gives traders a good opportunity to buy. I like the fact that AXP has been so obedient to that trend line support level -- we haven't had a close below that level since well before the October 2011 lows. If you decide to buy AXP, I'd recommend putting a protective stop just below last week's lows. I also featured American Express, one of Warren Buffett's stocks, recently in "5 Rocket Stocsk Worth Buying in June."
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