Stalking JPMorgan as a Bad-News Buy

 | Oct 30, 2013 | 7:00 AM EDT
  • Comment
  • Print Print
  • Print
Stock quotes in this article:


Bad news in JPMorgan (JPM) Yes, I saw that, and I thought about writing about another stock instead ... but I decided to put out the technical work anyway. 

I'm currently stalking JPMorgan for a possible buy entry. What I like about this chart is that price is currently above both the 200- and 50-day simple moving averages. I also like that recently JPM has taken out a couple of prior swing highs that are illustrated on the daily chart below. It took out the Oct. 4 high at $52.68, and it also took out the Sept. 10 high made at $53.93.

When I see a pattern shift like this, I like to look at the next pullback for a possible entry. This is the pullback that I'm looking at. So in the case of bad news, will this be a situation where the news is already discounted into the price? If you see a buy trigger against one of the following zones, I would recommend using a defined-risk options strategy.

I have identified two zones on the daily chart. The first zone comes in at the $51.75-$52.02 area, and it includes a couple of .618 retracements along with a 100% (symmetry) price projection of a prior decline. The second zone includes more 100% projections (also known as measured moves) along with a couple of retracements of the prior swings. As long as price continues to hold above one of these two zones, I will look at taking my buy triggers, and I will define my risk either below the $50.92 area (which is the bottom of zone 2) or below the Sept. 25 swing low made at $50.06.

Besides the price analysis, I'm also seeing some Fibonacci time parameters that are suggesting a possible low. Bottom line, I am still going to look at a defined-risk options strategy against this support decision. The potential upside targets come in at $55.61, $56.57 and $58.80. If $50.06 is taken out, however, I will consider myself wrong on the trade and will exit any long positions at that time.



Columnist Conversations

with the market getting a bit frothy here, we'll add some put protection. this is 2X normal size BOUGHT SPY...
Wendy's is extending last week's rally with another 2% of upside.  The stock is working on a 6 day winnin...



News Breaks

Powered by


Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.