American Express has been range-bound for months, and one
investor apparently thinks that the trend will continue.
The financial-service giant peaked at $46.29 yesterday, marking the
fourth time since December it has failed to break above $47. During
that time, it has also mostly held support around $43, but the
situation could now be turning more bearish because it made a lower
low this month and a lower high this week.
That could make some chart watchers may conclude AXP is ready to
make a push to the downside. The stock fell another 1.59 percent to
$45.18 in late morning trading today.
The two most active options contracts are the January 40 calls and
the October 43s, both of which were heavily sold, according to our
monitoring programs. The 40s traded more than 5,000 times, mostly
for $7.45 to $7.55. Volume was below open interest so the investor
may have unloaded an existing holding or opened a new short
Some 3,100 October 43s were also sold, mostly for $4.80. Volume was
more than 25 times open interest in that strike, so we know it was
an opening transaction. Activity in the two contracts accounted for
more than half the volume in the name so far today.
The next potential catalyst for the stock is the release of
first-quarter results on April 20. The last report on Jan. 25
showed continued improvement in bad loans, but AXP fell as
investors worried about potential regulation in the credit-card