Watch This American Express Support Level After Earnings Report

American Express shares are relatively flat after reporting earnings. Here's a notable support level to watch in the stock.
Publish date:

American Express  (AXP) - Get Report shares were directionless Friday, down about 0.5% after reporting its first-quarter results.

Despite bouncing more than 23% from the lows, shares remain 40% off the highs, with the weakness coming as little surprise with retail sales, traveling and consumer spending all under pressure.

Non-GAAP earnings of $1.98 a share beat expectations by 31 cents a share. However, revenue of $10.31 billion declined slightly year over year and missed estimates by more than $350 million.

Many investors are interested in what American Express has to say to hear about consumer spending. They're also looking for clues on Visa  (V) - Get Report and Mastercard  (MA) - Get Report.

With shares struggling for direction so far, let’s take a look at the charts to see if the technicals can provide any clues.

Mastercard is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells MA? Learn more now.

Trading American Express Stock

Weekly chart of Amex stock.

Weekly chart of American Express stock.

For now, American Express stock is holding up over $80. This level has been a rough level of short-term support over the past three weeks, as one can see on the chart above.

Should shares continue to bounce, I want to see if AmEx stock can reclaim $87, a notable level of support over the past few years. Above $87 opens up a window of potential upside.

Specifically, I’m keeping my eye on the $93.60 to $95 area. In this zone, we have the 38.2% retracement for the 2020 decline, as well as the 10-week and 200-week moving averages.

Above that puts $102 in play, which is the 50% retracement.

On the downside, investors need to keep an eye on the $78.74 mark, which is the April low. Below that figure opens up the stock to more downside, potentially putting $72.50 in play.

It’s hard to jump right to that type of bearish conclusion, although it’s not hard to imagine how American Express stock could come under pressure if it loses temporary support after an underwhelming earnings report. That’s particularly true if we get any sort of mild pullback in the broader market.

Here’s the bottom line: Watch $78.75 on the downside and $87 on the upside.