JPMorgan Chase (NYSE 🙂 is expected to report Q1 earnings on Friday before the market opens. Consensus is for EPS of $ 2.36 on sales of $ 28.47 billion.
The bank had totaled the expectations for three consecutive years until the last quarter, in which both had missed both. Was that the start of a downward trend, or just a fluke or correction, after a longer period of better than expected results?
The shares closed 0.7% at $ 104.87 yesterday, after winning 8.3% since the beginning of the year. As the technicals show, the stock is on the edge of a knife. Here is what the graph signals about the possible direction it might follow.
Unlike our bearish outlook for Wells Fargo (NYSE :), whose short, medium-term and long-term outlook all seems bleak, the signals are mixed for JPM – it floats between a potentially bullish short-term and bearish medium – for the long-term. While the pennant of WFC is bearish after the 8.3% drop in just 4 days (March 10 – March 22), after a breakout through a break, JPM's pennant is bullish after its 8.43% rally in just 8 days (25 March – 3 April). ]
JPMorgan Chase fell below the upward line since the December route, similar to WFC; unlike Wells Fargo, it broke out of its long-term downtrend line since 2018. Like Wells Fargo, JPMorgan Chase found resistance to the end of September 200 DMA (WFC, September 20, September 19). Unlike WFC, JPM scored above 50 and 100 DMA & # 39; s. Just like WFC, the RSI of JPM published a lower trough, clearing the path for falling momentum, but the MACD looks stronger, where the shorter MA is above the longer MA
The biggest conflict for JPM, however, is between the bullish pennant – complete with an upward breakthrough – and a very bearish double-top on the weekly chart.
JPM Weekly Chart
The prize completed a double top, then fell for the trough between the two peaks. Although the price managed to climb back above the neckline, the resistance below the short-running uptrend line (dotted line) and 50-week MA increases the potential that crossing the line does not change the bearish implication of the double-top
Therefore, a decisive breakthrough of the flag of the daily chart will determine the next major move. An upward penetration would indicate a failure of the double top, transcend the stop losses and create a huge short squeeze, which would raise prices. On the other hand, a failure of the bearish penny would confirm the weekly double-top pattern.
Trade Strategies
Conservative traders are waiting for a clear solution to the trend conflict, with the stocks either placing a higher peak above March 19, a high price of $ 108.40 or a new low below March 25, a lowest price of $ 98.09.
Moderate traders are likely to wait for a decisive pattern outbreak on a closing basis, then wait for the return movement to demonstrate pattern integrity, as the price is supported by an upward outbreak or resistance as prices fall from the bottom of the store pattern.
Aggressive traders may follow the outbreak, preferably on a final basis.
Trade Sample – Long Position
Admission: $ 106
Stop Loss: $ 105
Risk: $ 1
Target: $ 109
Reward: $ 3
Risk Reward Ratio 1: 3
Trade sample-short position
Listing: $ 104
Stop Loss: $ 105
Risk: $ 1
Target: $ 101
Reward: $ 3
Risk-Reward Ratio: 1: 3
