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AXP Triggers New Buy Signal; Headed for $100

With new agreements in place and positive technical signals, American Express is a buy


American Express (AXP) — On Oct. 17, this investment-grade global credit card and travel-related services stock broke from a five-month consolidation on heavy volume. I recommended the stock the next day with a 12-month target of $96 and a trading target of $86. The stock has now exceeded that trading target.

In late November, AXP announced an agreement with U.S. Bank to accept their credit cards on the American Express card network. Analysts are of the opinion that this new arrangement will enhance the experience of AmEx cardholders since U.S. Bank is renowned for its rewards and discounts. Wells Fargo (WFC) partnered with American Express in August.

Analysts’ consensus estimate are for earnings of $4.92 this year and $5.42 in 2014.

AXP’s high-volume breakaway gap from a quadruple-top has been confirmed by a powerful rally within a new bull channel. Last week, a new MACD buy signal was triggered, which was followed Thursday by a break to a new high.

With the new agreements in place and positive technical signals, the trading target is raised to $100 and the long-term target is increased to $120.

AXP Chart
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