Ticker Of The Week: American Express (NYSE: AXP)
As you’ve probably noticed, the stock indexes have been rallying for close to seven weeks now. During that period, the major indexes haven’t pulled back from any particular high more than 30% at any given time.
Take the S&P, which posted its previous high on April 17. So far, this is the longest the index has traded below a swing high since the rally began.
For weeks, I’ve been saying that we needed to see at least a four-day pullback in order to qualify as a “2-Wave” pullback. And aside from the Nasdaq indexes, which have remained stronger than the rest, both the large and small indexes have stayed below that April 17 high long enough to qualify as a “Wave-2″ pullback.
Now don’t go thinking that without a doubt, the indexes will head higher right away. That’s a possibility, especially since the Nasdaqs already have, but even if they do, the minimum upside price target on the S&P 500 is around 894.
As these indexes are now approaching areas where their weekly charts could give buy signals, there is good news out there…
You might be surprised at some of them, but there are a number of stocks still locked in “Wave-1″ of at least a three and possibly even a five-wave move to the upside. One of those stocks just happens to be American Express (NYSE: AXP).
AXP has rallied just about 150% since early March, and it still appears to be in that first wave higher.
If you’re going to take this particular opportunity, wait until after the inevitable profit-taking or correction sets in before buying it for at least a move above the “Wave-1″ highs.
At current levels, support on AXP comes in around $21.75 and then again at $19.45. Of course though, if the indexes undergo a sharp decline, a 50% retracement could take it down to the $17.60 area.
Jim Stanton
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