American
Express Co (NYSE: AXP)
Market Call™ for August 12, 1999
Contributed by Mark Seleznov, TrendTrader.com.
The purpose of this Market Call section is to
educate readers in technical analysis patterns and indicators. As with all investment
information, you need to research information and consult your financial advisor before
initiating any strategies that are contained in Market Call.
Also, you must realize that as with all trading strategies,
opinions can change quickly depending on market conditions and developments.
This column tries to present historical examples, potential set
ups, and examples of entry and exit strategies.
Also, you must realize that as with all trading strategies, opinions can
change quickly depending on market conditions and developments.
This column tries to present historical examples, potential set ups, and
examples of entry and exit strategies.
Combining Moving Averages and Support areas to find a tradable bottom on
a stock.
We have been oversold in the general market and a bounce soon can be expected.
I do not like to play a hero picking bottoms, but rather wait for a turn.
There are certain characteristics that can be looker for in determining a
tradable bottom.
By combining support and resistance levels with moving averages, a tradable
formation can be found.
Support levels are the price where the majority of traders feel the value
is a good buy.
Resistance is the level in which the majority of traders feel prices will
move lower.
When the majority of traders and investors change their expectations, these
support and resistance areas get violated and a new trend may be beginning.
The moving average crossover method calculates two moving averages, each
based on a different number of periods of trading data. When the
shorter-term (fewer days) average crosses above the longer-term average
from below, this is a buy signal. When the shorter-term average crosses
below the longer-term average from above, this is a sell signal.
The current charts we are using calculate a 5-period and a 20-period
exponential MA of the closing prices on 60 minute bars. If the 5-period MA
crosses above (becomes greater than) the 20-period MA, you would buy the
next bars opening because the system is saying that an uptrend has begun.
You maintain this long position as long as the 5-period MA is greater than
the 20-period MA. When the 5-period MA crosses below the 20-period MA, the
trend is now down and you would liquidate your long position and establish
a new short position on the next bars open.
Let's look at American Express Company, (NYSE: AXP).
After a steady decline from braking support a 140, AXP moved steadily down
to hit a low on both August 5 and August 6 of 122.
The first rally of AXP on August 9 had a lower high than the rally of
August 5. However, the low of August 10 did not move as low of the August 5
and 6 and stopped at 123.
Today, August 11, 1999, AXP broke above the resistance area of 127.
AXP closed slightly off its high, but seems to be moving up as indicated by
both breaking resistance and by have its short term moving average move to
a Buy signal for the first time in weeks.
I would Buy AXP here.
I would place my stop at 124 �.
Chart courtesy of
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Call Information
Mark A. Seleznov is a General
Securities Principal and Managing Partner of Trend Trader, LLC, a NASD, SIPC broker/dealer firm located in
Scottsdale, Arizona. A professional trader for over 25 years, Mark was a Market Maker on
the Philadelphia Stock Exchange, a Retail Registered Representative, and futures trader.
Mark is an author and recognized expert in equity Day Trading. He conducts seminars in
Equity Day Trading and offers his firm traders training and support. If his firm holds any
positions in the public companies he writes about, it will be noted at the bottom of his
article.
Market Calls is a daily syndicated column on trading by Mark A. Seleznov, Managing Partner
of Trend Trader,
LLC. For information on obtaining Market Calls for your web site,
newspapers, or publication, contact Trend Trader, LLC at 602-948-1146
Disclaimer: Trading in securities may not be suitable for
all individuals. Consult your broker or other professional to determine your suitability.
This is not an offer to buy or sell securities. The advice given above is of a general
nature and should not be taken as a recommendation to buy or sell the referenced security.
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All Rights Reserved. Republication of this material,
including posting to message boards or news groups,
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Last modified: March 17, 2001
Published By Tulips and Bears
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