In today’s Super Seasonals Trade of the Week we will look at American Express Company (AXP).
The stock performance in the past 12 months is Negative. The Daily technical composite indicator suggests a Strong Sell, while the Analysts rate it a Buy.
Below are the seasonal stats on American Express since 1980. We are coming into a solid seasonal move over the next 4 months.
Being a buyer of the stock, might require a bit of contrarian thinking at the moment, and/or a belief that the stock is currently oversold and a good buying opportunity might be upcoming.
Below is a daily chart of AXP. Price has broken below the last two Strong Pivot areas, which might lead to a potential stall in a confluence extension area at the $137.40-ish area.
Let’s theorize for a moment, that a reader believes that price holds around the aforementioned $137.40 area, and price action makes sense to buy shares there. A reader might have a target of $160.45. If they were looking for an “initial” risk to reward ratio of 3:1, then they would place a stop at $129.06.
Of course, some readers might prefer a wider stop, and target a 2 to 1 reward to risk ratio.
If a reader is bullish now, and believes price will hold or close above 145, prior to Dec 15 expiration, this might be a good debit spread to consider. Maybe try for a $2.50 fill, so it’s an equal risk vs reward. A good exit might be 70-80% of potential max profit.
If a reader is bullish now and thinks price will get to 150 and possibly hold prior to Dec 15 expiration, here’s a lower risk debit spread with more attractive risk vs reward. However, you are asking for more of an upside move, than the previous debit spread.
As you likely know, there are literally dozens of solid ways to approach trading American Express Company (AXP) with a bullish bias. The decision of how to best invest in the stock or trade the options is an individualized decision, unfortunately there is no one best way. Hopefully this information has proved worth your time. Please remember, do your homework, and fully understand the risk before trading anything.
To learn more about seasonal information on American Express Company (AXP) and other solid seasonal opportunities click here SuperSeasonals . For other seasonal opportunities, please click on the link below to access the Super Seasonals software:
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