AmEx Looks Vulnerable

American Express (AXP) is beginning to look unstable. The stock is off slightly today and drifting out of a bullish channel that has been in place since early April. This is a noticeable reversal from the bullish action at the start of the week, when AXP closed at new 52-week highs for the second straight day. Despite very strong volume during Friday's 2.4% jump, the momentum eased Monday even as shares reached fresh highs. In addition, AXP is coming off its highest overbought reading since the spring 2009, a level hit late last month. I believe the stock is headed for a healthy pullback before shares can make their way to $80.

American Express (AXP) Source: TradeStation View Chart » View in New Window »

AXP shares vaulted more than 20% following the powerful April 18 surge. Prior to this bull channel move, the stock had already gained 12% from the 2012 close. Outside of the shallow pullback in early April, AXP has given back very little of its 2013 rally. I believe this trend is about to change and the stock will struggle in the near term. A healthy pullback and consolidation is long overdue and that will set shares up well for a new leg higher....92 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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