American Express Co. (AXP) Stock Moves Down and Here’s Why

American Express Co. (NYSE: AXP) shares fell yesterday on heavier trade volume than normal after a number of analysts weighed in on the investing value of the stock with a downgraded rating.

Shares of American Express Co. (NYSE: AXP) were downgraded by analysts at Nomura in a note to their investors today. With a rating of Reduce on the stock, American Express Co. has a 52-week high of $77.82. As a means of comparison, a number of other analysts have issued reports on the company recently, and the company has earned a consensus one-year price target of $67.77, higher than the opening price of $63.56, a difference of 10.94 percent. Important and crucial digressions in the company’s operations, future vision or industry can cause downgrades as the analysts feel that the future prospects for the security have weakened from the initial recommendation.

Meanwhile, U.S. stocks closed flat Thursday as trading stayed lukewarm in the wait for the nonfarm-payrolls report. U.S. employment growth likely picked up in September, putting pressure on the Federal Reserve to raise interest rates

For the week so far, the Dow industrials DJIA, -0.07% are down 0.2%, the S&P 500 SPX, +0.05% is off 0.4%, and the Nasdaq Composite COMP, -0.17% has lost 0.1%.

American Express Co. (NYSE: AXP) shares last traded at $61.94, a drop of $2.42 per share or -0.04 from the previous closing price. Opening at $63.56, they varied from $61.76 and $63.68 throughout the day.

American Express Co. (NYSE: AXP) now has a market cap of 57.22B.

American Express Co.Trading Volume

7,975,905 shares traded hands yesterday, higher than the norm, out of a total float 769,888,000. Significant expansions in trading volume and price growth together could signal excessive volume accumulation by institutional investors.

While an increase in trading for one day will not mean much, however, a trend of heavy trading volume on the buy side over a series of days or weeks delivers a positive indicator to market traders that institutions may be moving in, so institutional sponsorship is crucial.

Institutional sponsorship commonly refers to ownership of a stock by mutual funds, banks, pension funds and other large institutions.

Professional investors such as these retain teams of analysts that research thousands of stocks. Thus, watching their interests is a good way to make sure you are buying the right stocks.

American Express Co. Moving Averages

A moving average can also act as support or resistance. In an uptrend a 50-day, 100-day or 200-day moving average may act as a support level, as shown in the figure below.

This is because the average acts like a floor (support), so the price bounces up off of it.

In a downtrend a moving average may act as resistance; like a ceiling, the price hits it and then starts to drop again.

By following the activity of these professional investors—and the moving averages they affect—it allows for traders to make more useful judgments on trades.

With that in mind, American Express Co. (NYSE: AXP) now has a 50-day MA of $64.63 and 200-day MA of $63.61. It has traded in a 52-week range between $50.27 – 77.82 and today’s last price is 0.20% lower than the 52 week high of $77.82.

Indeed, earnings growth is among the most important things to look at in regards to stock investing and, accordingly, investors watch for companies that have grown their earnings by at least 25% for 3 consecutive years.

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