The Plan on AXP

Need to See Directional Bias Before Making Next Move

By Bryan Bottarelli
Thursday, October 20, 2011 12:37 PM EDT
Thu, 20 Oct 2011 16:37:00 GMT

Dear Bottarelli Research Member,

As you know, our other earnings play for today was American Express (AXP – NYSE), which reported a mixed-bag report. Although AXP reported a 13% increase in Q3 profits, that didn’t stop analysts from downgrading the stock. As a result, shares of AXP are now in a battle right at their support level at $45.00.

Because of this, we have to maintain both sides of our AXP 45/46 Earnings Strangle until we get some directional clarity. For example, if AXP bounces at $45 support and moves past $45.70 (or so), the play would be to sell our puts and hold our calls. Conversely, if AXP fails to hold the line at $45 and moves to a new low of the day, the play would be to sell our calls and hold our puts. As is stands, we can still do well with this play but we just have to pick the right direction to ride. Until we know the answer, hold both sides until further notice.

And as always…

Lock and load!

Sincerely,

Bryan Bottarelli
Editor, Bottarelli Research
Featured in this Alert:

© 2013 CSR Group, LLC. All rights reserved. Published in USA.

Information, opinion, research, and commentary contained herein is obtained from sources believed to be reliable; their reliability, however, cannot be guaranteed. The maxim of Caveat Emptor applies — let the buyer beware. Bottarelli Research does not provide individual investment advice, act as an investment advisor, or individually advocate the purchase or sale of any security or investment.

Investments recommended in this service should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Bottarelli Research reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscriber’s initials will be used unless express written permission has been granted to the contrary.

CSR Group, LLC expressly forbids its writers from having a financial interest in any security recommended to readers. Furthermore, all employees and agents of CSR Group, LLC and its affiliate companies must wait 24 hours before following a published recommendation.

Premium Subscriptions

For specific buy and sell recommendations, subscribe to a Bottarelli Research trading advisory service.


Sign up for the free
Bottarelli Research Chart of the Day and Newsletter