AXP has outperformed nicely since the December lows…as it rallied almost 44% from those lows to its July highs. However, it has rolled over a little bit recently.
The decline took AXP below its trend-line from last year’s low. The mid-month bounce took it right back up that that trend-line, but it failed to break back above it…and has rolled over once again. If it breaks below its early August lows in any significant way…and thus give it its first “lower-low” since December, it will confirm that its intermediate-term trend has changed.
As always, we don’t want to get ahead of ourselves. AXP will have to break below those June lows before we'd raise a red flag on the stock. However, if AXP does indeed fall further from here, it could quickly pick-up the kind of downside momentum that could take it down sharply rather quickly.
We’d highlight the 108.75 level as a downside target. That is the lows from March…and a 50% retracement of the December-July rally. That would give it another 10% downside movement from that key support level.