History Says Buy the Dip on This Blue-Chip Stock

Year-over-year, the equity maintains a 15.3% lead

Digital Content Manager
Apr 29, 2022 at 3:10 PM
facebook twitter linkedin

American Express Company (NYSE:AXP) is down 2.3% to trade at $177.83 at last check. The blue-chip name has faced some volatility since its Feb. 16, record high of $199.55, with at least three rallies since then falling short of the $195 level, despite a valiant bounce off the $156 region. AXP is up 15.3% year-over-year, however, and there's reason to believe it may move higher still after a pullback to a historically bullish trendline.

Specifically, American Express stock recently came within one standard deviation of its 160-day moving average. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, comparable moves occured seven times in the last three years, with AXP seeing a positive one-month return 83% of the time, and averaging a 7.9% jump. A similar move from its current perch would put the equity back above the $191 mark.

AXP 160 Day

A shift in sentiment amongst the brokerage bunch could create additional tailwinds for American Express stock. Of the 17 firms in coverage, 10 call the equity a tepid "hold."

The security would also benefit from an unwinding of pessimism in the options pits. This is per AXP's Schaeffer's put/call open interest ratio (SOIR) of 2.13, which stands higher than 91% of readings from the past year, suggesting short-term options traders have rarely been more put-biased.


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners