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 high of $199.55, with at least three rallies since then below the $195 level, despite a valiant bounce off the $156 region. However, the AXP is up 15.3% year over year, and there is reason to believe that it could rise further after a pullback towards a historically bullish trend line.
Specifically, American Express stock recently traded within one standard deviation of its 160-day moving average. According to data from Schaeffer’s senior quantitative analyst, Rocky White, comparable moves have occurred seven times in the past three years, with AXP posting a positive one-month return 83% of the time and averaging 7.9% jump. A similar move from its current perch would bring equity back above the $191 mark.
A shift in sentiment among brokers could create additional tailwinds for American Express shares. Of the 17 companies covered, 10 call equity a lukewarm “wait”.
The title would also benefit from an outcome of the pessimism in the options stands. This is AXP Schaeffer’s put/call open interest ratio (SOIR) of 2.13, which is above 91% of last year’s readings, suggesting options traders short term have rarely been more biased by put options.
7 Consumer Discretionary Stocks That May Defy Expectations
Consumer discretionary stocks are those of companies that make products that are popular, but not considered essential. These stocks tend to perform well in a bull market, but can lag the broader market during periods of volatility. And over the past six months, the volatility the market has endured adds risk to buying consumer discretionary stocks.
Simply put, consumers will need to be discerning because there are plenty of stocks that will misbehave. However, as with most sectors of the market, it is important that investors do not paint all consumer discretionary stocks with a broad brush. Several companies continue to show solid demand that remains in place. This despite high inflation and rising interest rates.
This is the subject of this special presentation. We highlight seven consumer discretionary stocks that are worth keeping in your portfolio, no matter what’s happening in the broader market.
See “7 Consumer Discretionary Stocks That Can Defy Expectations”.