Send me real-time posts from this site at my email
Fan Yang

American Express (AXP) Signals More Recover Despite Missing Earnings

American Express $AXP had a mixed earnings report.

Here was the report from CNBC on 1/17:

American Express reported fourth-quarter revenue on Thursday that narrowly missed analysts' expectations and an earnings profit after reporting a loss for the same period a year ago.

Annual profit for the financial services company in 2018 was more than double what it was a year earlier, capping a solid year for AmEx.

Here's how the company did compared with what Wall Street expected:

Earnings: $1.74 adjusted earnings per share vs. estimates of $1.80 per share forecast by Refinitiv.
Revenue: $10.47 billion vs. $10.56 billion, forecast by Refinitiv
Shares of the credit card issuer fell roughly 2.5 percent in after-hours trading Thursday.

American Express brought in $10.47 billion in revenue for the fourth quarter of 2018, an 8 percent rise from a year earlier, according to the company. Still, the number was below the $10.56 billion expected by Wall Street.


Its full-year revenue guidance for growth was between 8 and 10 percent, versus Wall Street's expectations of 7.5 percent. The company's full-year earnings per share guidance was forecast to be between $7.85 and $8.35, in line with expectations of $8.12.

From: American Express drops after missing Wall Street's fourth-quarter expectations

The market initially sold from around $100 down to about $97 a share. Within the 1/18 (Friday) session, the market then bought it back up above $100 into new highs on the year.

Ultimately, the markets give guidance more weight than previous quarter's profits. Guidance was in-line/slightly-better-than expectations, which is fueling the current recovery in AXP .

AXP Daily Chart

(click to enlarge)

Bullish Engulfer:
- The whipsaw reaction surrounding earnings created a bullish engulfing candle for Friday's price action.
- This price action suggests there is further upside at least in the very short-term, with $104-$105 being where I think price will find resistance.
- The cluster of 200-, 100-, and 50-day simple moving averages is around $104. The market found resistance just under $104 back in 2018. 
- Meanwhile, I would expect resistance when the RSI rises to 60 area - assuming that AXP is still in bearish correction mode. 
- Of course, there is a chance that the general market correction is over and names like AXP would be back in bullish mode. 
- On the weekly chart, we can see that price held above a key rising trendline, keeping the bullish mode intact. Also, price remained above the 200-week SMA, and the RSI held above 40, which reflects maintenance of the prevailing bullish momentum.
- I think it's too early to call this a bullish continuation. I would anticipate more choppiness and sideways action before the market is ready to continue the  uptrend - and this anticipation goes for both general equities market and AXP. 

AXP Weekly Chart

(click to enlarge)

Welcome!!! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue