DailyPlay – Opening Trade (AXP) – June 18, 2024

AXP Bullish Opening Trade Signal

Investment Rationale

As consumers become more selective in their spending, restaurants and travel remain bright spots in consumer spending. With American Express’s focus on premium customers who are continuing to spend in these categories, AXP is positioned to outperform its industry. 

Technical Analysis

If we look at chart of AXP, it’s had an incredible run over the past year, rallying nearly 60% from the Oct 2023 lows, and recently, it has pulled back 8% from its peak a few weeks ago to its key $225 support level. This presents a more attractive risk/reward for adding long exposure within this strong bullish trend.

AXP – Daily

Fundamental Analysis

Shifting over to the business, AXP is expected to grow EPS at an above average clip of 15% and revenue at 9%, yet it trades at a 12% discount to the average S&P 500 stock. With net interest income and card fees expected to grow,  this discount reflects the upside opportunity for AXP to trade back towards its 52-week highs and beyond.

Trade Details

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish Debit Spread

Details: Buy to Open 2 Contracts August 16th $220/$240 Call Vertical Spreads @ $10.00 Debit per Contract.

Total Risk: This trade has a max risk of $2,000 (2 Contracts x $1,000) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $1,000 to select the # contracts for your portfolio.

Counter Trend Signal: This is a bullish trade on a stock that is expected to bounce higher off support.

1M/6M Trends: Bearish/Neutral

Relative Strength: 9/10

OptionsPlay Score: 95

Stop Loss: @ $5.00 Credit. (50% loss of premium)

View AXP Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Monday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View AXP Trade