American Express (AXP) Riding Trend Channel Higher
Over the last eight months, American Express (NYSE: AXP) has been trending higher with a trend channel defining the peaks and valleys. The stock just hit the lower rail of the channel and it looks like it is ready for another move to the upside in the coming weeks.
We see that in addition to the stock hitting the lower rail it was also oversold based on the 10-day RSI and the daily stochastic readings. The last time we saw both oscillators in oversold territory and the stock hit the lower rail of the channel was in late June.
The stock was trading around $96 at the time and it went on to rally to a high of $103.87 on July 27. That is a move of approximately 8% in just over a month.
In addition to the technical picture, American Express has great fundamentals. The company has a return on equity of 27.6%, a profit margin of 20.9%, and an operating margin of 24.7%. The company has also been able to grow its earnings at an average rate of 22% per year over the last three years.
American Express is set to release third quarter earnings results on Thursday, October 18 and analysts expect the company to earn $1.76 per share on revenue of $10.04 billion.
Momentum Indicator for AXP turns negative, indicating new downward trend
AXP saw its Momentum Indicator move below the 0 level on April 04, 2024. This is an indication that the stock could be shifting in to a new downward move. Traders may want to consider selling the stock or exploring put options. Tickeron's A.I.dvisor looked at 91 similar instances where the indicator turned negative. In of the 91 cases, the stock moved further down in the following days. The odds of a decline are at .
Technical Analysis (Indicators)
Bearish Trend Analysis
The 10-day RSI Indicator for AXP moved out of overbought territory on March 22, 2024. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 36 similar instances where the indicator moved out of overbought territory. In of the 36 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
AXP moved below its 50-day moving average on April 16, 2024 date and that indicates a change from an upward trend to a downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where AXP declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
Bullish Trend Analysis
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 6 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where AXP advanced for three days, in of 329 cases, the price rose further within the following month. The odds of a continued upward trend are .
AXP may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Aroon Indicator entered an Uptrend today. In of 223 cases where AXP Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 75, placing this stock better than average.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. AXP’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (5.841) is normal, around the industry mean (4.672). P/E Ratio (20.304) is within average values for comparable stocks, (53.143). Projected Growth (PEG Ratio) (1.572) is also within normal values, averaging (3.039). Dividend Yield (0.010) settles around the average of (0.042) among similar stocks. P/S Ratio (2.775) is also within normal values, averaging (4.549).
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a financial conglomerate
Industry FinanceRentalLeasing