All aboard the American Express

One of the charts that caught my attention this weekend was $AXP as it looks to be at a very critical point here on the Daily chart. Here’s a look:

As you can see above, there are several things that stand out:

  • The RSI is squatting on 50, drifting down from above
  • The MACD has rolled over and has the potential to cross down
  • Volume has been rising on this move down in price to end the week
  • Price has fallen down back thru the upper declining Trend Line of the Wedge – back into the apex.
  • The 50 day simple moving average is just below, and looks like the next magnet for price. The lower rising Trend Line wedge just happens to be intersecting there as well. Oh boy.

I will be stalking this one this week as I think we will see some of these above items get resolved. One way or the other.

All aboard.

3 thoughts on “All aboard the American Express

  1. Dear Mr.Muniz , I have a quick question regarding $QCOR . After the plunge last week I went long the Jan 25 calls ( 8.30) and was going to sell the $ Jan 40 calls . They did not fire on Thursday , and I missed my limit by ten cents on Friday . The stock opened at $32 + hit $33.00 and basically closed at $30 on Friday option expy. Well today the Jan $25 got crushed and same with the $40 calls . I was wondering how you would gave hedged last Thursday . My plan to hedge was simple . Long the $25 calls and short the $40 calls .

  2. I certainly do feel for the situation you are in. I am not sure how to answer your question due to the difficulty in trying to think in terms of where the stock was last Thursday.
    Here is what I can say. A call spread, as you define as your plan above, is not a hedge. You are simply offsetting some of the cost of the long call by selling upside calls. A hedge would be to short the stock.
    Given your situation, consider this: sell weekly premium to begin the process of shrinking your outlay for the Jan 25 Calls. You have roughly 15 weeks until Jan expiration so build a plan for how much you need to take in.

  3. Hi , thanks for reply . When I purchased calls stock was at 28.40. The stock opened up strong on Friday and HOD was $ 33.00 . The $25 call barely moved as the spread was large but there was good volume in the $40 calls . I just missed it by a darn dime . I did not expect a federal probe today . The company conference call was about AETNA . Yes my goal was to go long the Jan 25 and sell the Jan 40 . You are correct I wanted to lower my cost basis on my long position . Plan was okay , timing was a tad off and I had no idea the other shoe would drop . This firm was just in the IBD 50 .
    Thanks , regards , Scott

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