Friday, 6 April 2012

AXP - cruising higher

AXP is not a stock I follow very much, but American Express is currently interesting from a chart perspective, and may offer a clue as to where the main market will move next week.

AXP, daily, near term

We have a pretty good baby bull flag for the past 9 trading days. AXP downside risk would be $54, but - if main market opens up reasonably strong on Monday, this stock will be a perfect example of why this market is going to keep going up for some time to come.

With a forward PE of 12, AXP is not that expensive, so there is a fair chance of at least another 10% higher in the next few months. 

The 1.4% dividend (forward yield) is a little light (certainly compared to the previously highlighted INTC), and the net profit margin is also lower, but still a very reasonable 17%. 

No one could seriously suggest AXP doesn't have a good long term future, whether its better than Mastercard or Visa, I'm not sure, I haven't looked as those lately! I shall leave that for another time.

In the meantime -just like the main indexes, the current primary trend for AXP remains up. Lets see if the bull flag is confirmed, and can be broken above next week.