American Express Stock Surges to Market Leadership
In 2019, American Express stock has been closing the gap with competitors Visa and Mastercard, achieving multiple record highs.
American Express Company (AXP), a key Dow component, reached a historic peak in April after surpassing first-quarter earnings per share (EPS) estimates by $0.04 and reaffirming its 2019 outlook. Following this, several analyst upgrades throughout May and June have bolstered its momentum, further fueled by rumors of a potential merger with The Goldman Sachs Group, Inc. (GS).
Now ranking sixth among Dow components by performance, American Express is just behind Visa Inc. (V). After years of trailing Visa and Mastercard Incorporated (MA), Amex has impressively caught up since 2017, matching its rivals' upward trajectory. This positive trend signals promising returns for the new decade, supported by the company's extensive product offerings and affluent customer base.
AXP Long-Term Performance Chart (1990 – 2019)
Beginning in early 1993, the stock completed a double bottom reversal at a split-adjusted price of $4.63, initiating an uptrend that gained momentum after surpassing 1987 resistance levels in 1995. Despite a brief downturn during the 1998 Asian financial crisis, aggressive buying propelled a rally to an October 2000 peak at $55.15, followed by a gradual decline that found support in the low $20s post-September 11, 2001.
Higher lows in 2002 and 2003 set the foundation for substantial gains, fully recovering to the 2000 peak by 2006. The stock broke out seven months later, climbing into the mid-$60s in 2007 before sharply declining and breaching support levels from 2001 and 2002 by November 2008. Selling pressure eased at a 13-year low in single digits by March 2009, leading to a recovery that reached 2007 resistance in 2013.
The uptrend paused in the mid-$90s in 2014, and the subsequent decline bottomed near the 200-month exponential moving average (EMA) around $50 in 2016. This marked a prime buying opportunity, followed by a swift rebound that surpassed 2014 resistance by December 2017. After retesting this level in early 2019, the stock surged, achieving a series of record highs, including a peak above $126 in late June.
The monthly stochastic oscillator entered a buy phase above the midpoint in March 2019, signaling strong relative strength, and reached overbought territory in May. However, price movements remain balanced, suggesting further gains are possible through the summer. Additionally, the rising 50-month EMA approaching $100 increases the likelihood of the stock testing this key psychological level again, offering a low-risk entry point.
AXP Short-Term Performance Chart (2016 – 2019)
Since 2016, the stock has established a trendline of higher lows, with 2018 highs forming a rising channel pattern that was decisively broken to the upside in June 2019. The stock found support shortly after and may advance beyond the $130 range in the coming weeks. This trendline will serve as initial support during any intermediate pullback, aligning with the 50-day EMA near $118. A breakdown could open the path to the lower trendline and the critical $100 psychological level.
The on-balance volume (OBV) accumulation-distribution indicator peaked in 2010 and plateaued in 2014 and 2015. The following distribution phase bottomed at a seven-year low in 2016, sparking renewed buying interest that reached 2010 resistance again by August 2018. Since then, the indicator has moved sideways, potentially offering reliable directional signals once it shifts upward or downward.
Summary
American Express shares have demonstrated robust growth in 2019, narrowing the gap with credit card industry leaders by achieving multiple all-time highs.
Disclosure: The author did not hold any positions in the securities mentioned at the time of publication.
If you have news tips for Investopedia reporters, please contact us at tips@investopedia.com.
Explore useful articles in Company News as of 25-06-2019. The article titled " American Express Stock Surges to Market Leadership " offers in-depth analysis and practical advice in the Company News field. Each article is carefully crafted by experts to provide maximum value to readers.
The " American Express Stock Surges to Market Leadership " article expands your knowledge in Company News, keeps you informed about the latest developments, and helps you make well-informed decisions. Each article is based on unique content, ensuring originality and quality.