understanding the psychology of behavior

Took a look through my many many charts, and AXP jumped out.

Techincally, it looks like a nice entry point. The recent decline is thanks to the earnings miss, and ‘ho-hum’ guidance issued by management. Obviously these are things to be concerned about, but based on the recent quarterly report I don’t think it merits staying away from the stock. IMO, management set the bar low. Also, an analyst at Stifel Nicolaus essentially stated,
AXP pretty much did very good w/top line, but not so well for bottom line due to investments that should pay off later. This etting the bar low for better performance in the future. To me, that translates into a buy signal when I look at a chart like the one above.

Now a caveat, when looking at a 2yr chart, AXP has a history of being around the 200SMA during declines. So enter in stages, monday can act as a good 1st stage entry point. And 55 can be 2nd stage. Keep in mind, Fed will be talking on the 31st, and what happens there may cause a decline in the market. (A lowering tide usually lowers all boats, except for the really cheap ones like COF.)

This entry was posted on Saturday, January 27th, 2007 at 2:02 pm and is filed under stocks. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.