AXP: American Express iMTF™ Bottom to Bullish Trend

AMP: American Express iMTF™ Bottom to Bullish Trend.  Last month, we wrote an article on how to recognize top/bottom with the iMTF™ .   Here is an example of a bottom that was establish which led to a full trend in June.

All charts are provided by eSignal.

Below is the 240m chart for $AXP, American Express.    At the beginning of June, here is what the 240m looked like.  The chart looked bearish with a high probability of retesting the low.

On June 1, price reversed and you had swing/long black square acting as support and resistance.    For a bottom, we look for a the black squares to go higher.   In this situation, we got one for resistance and one for support.   You can see the battle between supply/demand.    Now, it was time to be patient and wait to see which square disappears.   Once we see that, we will know who won the battle.

June 5, price broke the resistance and got above the cloud.   Now, we just need to wait for the green shaded area to come to setup for a trade.

On June 6, we got the shaded area with black squares.  Therefore, we can setup for both pull back and breakout or just one.

Below is the current chart for $AXP.  Notice when it retest the last high before starting the trend, it had black squares below price.   Price consolidation on retesting the high but due to the black square support, it broke out eventually.    If the black squares weren’t there or disappeared than you could have bounded off the major resistance.

Below is the current daily chart.  Notice when the 240m had a bullish setup, there was ALSO a setup on the Daily timeframe, the higher time frame.

 

Below is the weekly time frame. November 2016, $AXP broke out on weekly timeframe for a bullish trend.   The traders that entered this trade are still in this trade!     Therefore, the 4h and Daily setup are just trend continuation trades for the “master” weekly trend.

Here is one possible option strategy you could implement on this trade.   It is a OTM option that cost $87/contract for a Oct 87.50 call.   It is over 1:1 reward/risk so far.

What we just showed you is a multiple timeframe setup.   The reward is opened up due to the higher time frames.   These are the best trades because they give reward/risk higher than 3:1 when they occur.   If you want to find these setup, look at the iMTF™ Strategy Email alerts.

About the Author Manesh Patel