The Financials sector continues to struggle with rising treasury yields. Despite a positive earnings report and an upbeat earnings call, credit card provider American Express (AXP) fell 5.4% on Friday.
American Express has been trending downward within the SIA S&P 100 Index Report Since March. It re-entered the Red Unfavored Zone in September and since then it has declined 11.3%.
AXP is currently in 64th position after falling 5 spots on Friday and dropping 31 places in the last month. For most of the last year, American Express (AXP) has been trending sideways between approximately $142.00 and $178.00. Resistance at the top of this range was confirmed back in July, and since then, the shares have been under distribution, staging a downswing within that range.
Friday’s market action (circled) was particularly ugly. Despite a positive earnings report, the shares gapped down on the open, the bulls tried to mount a comeback, this failed near $155.00, confirming a downtrend resistance line, then the bears took over and drove the shares to a lower close near the lows of the day, all on an increase in volume.
Initial support appears at the current channel bottom near $142.00. A breakdown there would confirm the start of a new downtrend with next potential support near $130.00, then a measured $106.00. Initial upside resistance appears near the $150.00 round number, then Friday’s intraday high near $155.00.
Back in July, American Express (AXP) failed to break though resistance near $180.00 and since then it has been under distribution with its technicals deteriorating significantly. Over the last three months, the shares have snapped an uptrend line, and staged two bearish Double Bottom breakdowns which has combined into a Bearish Catapult.
Currently, AXP is testing a long-term 45-degree support line near $136.55, which if broken, would signal the start of a significant new downtrend. Next potential downside support after that appears as a previous low near $131.25, followed by $123.65 and $107.65, both of which are based on horizontal counts. Initial resistance on a rebound may appear near the $150.00 round number, or $153.80 based on a 3-box reversal.
With a bearish SMAX score of 2, AXP is exhibiting weakness against the asset classes.
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