American Express Company (AXP) is one of the biggest credit/charge card company out there, it sure gets a big piece of the “credit card spending” pie.
As a result, traders are speculating on an outstanding 2010 4th quarter net earnings for American Express this coming January 24 which has been causing its stocks to move higher for the past two weeks.
On my last post on American Express (kindly check here), it seemed there was a head and shoulders formation and the stocks were bound to drop based on my technical analysis. What looked like a bearish formation could actually be a consolidating rectangle (could be a triangle for others). Since I’m biased with the uptrend of my stock pick, the rectangle is more likely bullish. In case the stocks breakout above the rectangle’s resistance, I see an upside target of 58.00 USD which is almost a 30% gain from the current value of 44.73 USD. I got my target price by measuring the size of the base of the rectangle then added it to the possible breakout point. This could end the 1-year sideway consolidation of the stocks. However, along its possible rise, AXP could encounter some selling pressure at 49.19-50.00 and 52.63 resistances. On the flip side, the immediate support could be the 22-month uptrend. If that gets broken, the next level could be the rectangle’s support.
*If you want to see my first post on this kindly click here.