American Express Stabilizes Near Key Support
Back on April 20, shares of American Express surged nearly 6% on its heaviest volume of the year. This earnings driven breakout was the stock's best single-day performance in six months. Unfortunately for AXP investors the upside momentum was unable to lift the stock to new 2017 highs. The result has been a fairly deep pullback and a very low risk entry opportunity for patient bulls.
AXP has been trading in a narrow range for all of 2017. The stock completed a major rally leg, that had carried shares over 35% higher from the October lows, as March began. Since the start of March AXP has been moving sideways while building a solid base near the $75.00 to $76.00 area. This key zone has held January, April and now May lows. With this area back in play investors should consider the stock a low-risk buy.
Last week AXP filled the huge post-earnings breakout gap left behind on April 20. This level marks the top band of an important support zone that includes the January low at $74.75. If shares can continue to stabilize here a fresh rally leg could soon follow. On the downside, a close below $74.00 would leave behind a massive amount of overhead pressure. AXP would then be vulnerable to further downside.
At the time of publication, the author was long AXP.
