January 16 Chart of the Day - American Express
Precision oriented price action technical analysis by far provides the best edges and most setups for traders and investors across the markets so that's what we use for the basis of our reviews
American Express (AXP) is making headlines today because it agreed to pay a total of about $230 million to settle allegations of past deceptive marketing practices associated with its wire products.
Traders and investors seemingly yawned this off as the company's share price slightly dropped by 84 cents today after setting new all time highs about 24 hours ago.
With earnings scheduled for January 24 we wanted to review their chart from a price action technical analysis perspective.
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Monthly Chart
On the monthly chart we can see that after setting its $314 all time high (ATH) just a few short hours ago price does what it normally does after performing such a feat... it decides what to do next.
It can be said that when any chart is trading at or near ATHs price goes through what is known as a "discovery phase." Meaning, price can wander around a bit creating new structure. Price can often back test the area around the previous ATH because what previously was acting as resistance can now act as new support (but not always)
To assist in identifying potential pullback zones of interest we used an Advanced High to High Fibonacci (orange) where certain price action conditions must exist in order to properly use these anchors. (Learn more about Advanced Fibs here)
Weekly Chart
On the weekly chart we can see with much more clarity the forceful breakout above previous ATHs ($286.43) up to $314.
Closing at $311.48 today price may be deciding whether to surpass the ATHs or continue pulling back towards previous structure.
If the Advance Fibonacci ultimately ends up not holding we'd be looking for a potential retest of the breakout level in the $240 area. But if price were to continue powering up from here it could be targeting the $330 level, or higher.
It's likely price could just chill until earnings before making its next decisive move.
It goes without saying though, the only guarantee in the markets is that price cycles. It cycles up and it cycles down across all time frames and all charts and rarely, if ever, moves in a straight line.
Only time will tell for sure what price will do next...
We've layered in traditional Fibonacci levels as well as support/resistance and trend to help identify potential price levels of interest and/or future price targets.
Armed with precision oriented charts like these both traders and investors can formulate their respective plans.
So what's next?
We don't make predictions...
Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.
- Support/Resistance
- Trend
- Fibonacci
- Supply/Demand Zones,
- Change Control Zones
ChartPros provides the exact methodology in its price action technical analysis courses to create charts like this with the most precise and accurate levels from which investors and traders can formulate their respective trade plans.
Take a look at the charts and let us know what you think. We'd like to hear from you in the comments sections.
