American Express, $AXP, started higher in December and stalled as it hit the prior high. After a minor pullback it continued to the upside making a higher high and then retested the break out. It then advanced further to a top in July. Since then it has been pulling back and last week dropped through the 200 day SMA, retracing just over 38.2% of the full move higher. The last 3 days it printed a Morning Star reversal pattern and closed back at that prior resistance.
The RSI turned back up as well out of oversold territory, with the MACD leveling after a pullback. There is resistance now at 114.50 and 116.50 then 119.50 and 121.75 before 123.40 and 126.50 then the top at 129.40. Support lower comes at 112 and 109.40 then 106.50. Short interest is low under 1%. The company is expected to report earnings next on October 18th before the market opens. The stock pays a dividend with an annual yield of 1.50% and started trading ex-dividend October 3rd.
The October options chain show the largest open interest at 110 and 115 on the put side. It is bigger at 115 and 120 on the call side. The at-the-money straddle suggest a $4.50 move by expiry. November options have highest open interest at the 75 and 80 put strikes and then the 120 and 125 calls. January options open interest peaks at the 90 and 95 puts, but the 125 calls.
American Express, Ticker: $AXP
Trade Idea 1: Buy the stock on a move over 114.50 with a stop at 112.
Trade Idea 2: Buy the stock on a move over 114.50 and add an October 112/110 Put Spread (53 cents) while selling the November 8 Expiry 122 Call (60 cents).
Trade Idea 3: Buy the October/November 120 Call Calendar (90 cents) and sell the October 110 Put (88 cents).
Trade Idea 4: Buy the November 105/120/125 Call Spread Risk Reversal (4 cents).
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