The chief executive officers from a number of major U.S. financial institutions are scheduled to meet with President Trump in the White House cabinet room this afternoon. Gordon Smith, CEO of JP Morgan's (JPM) consumer and community banking division, will also attend the gathering in place of Jamie Dimon, who is recovering from emergency heart surgery. (I had heart surgery a year ago so I wish him a speedy recovery and know what the recovery timeline is like.)
Let's check out the charts of JPM this morning, our 'Stock of the Day', to see what the damage looks like on this Dow Jones Industrial Average (DJIA) component.
In this daily bar chart of JPM, below, we can see that prices have been punished since the beginning of the year. The slide from $140 has been swift and relentless. If you blinked you probably missed any intraday bounce. Prices are below the declining 50-day moving average line and we can also see that the slope of the 200-day moving average line has turned down.
The daily On-Balance-Volume (OBV) line shows a peak back in December and then sideways action into February. With the OBV line now pointed down we can see that sellers have become more aggressive.
The Moving Average Convergence Divergence (MACD) oscillator issued an outright sell signal last month.
In this weekly bar chart of JPM, below, we went back further in history to see what traders and investors may be looking at if the $90 price low of late 2018 is broken. Using a downside swing objective, the next price below $90 could become the $70 area.
The 40-week moving average line is well above the price action now and curving lower.
The weekly OBV line has turned lower and the MACD oscillator is approaching the zero line.
In this first Point and Figure chart of JPM, below, we used daily price data and here a potential price target in the $87 area is being projected. Not all that far below the market.
In this second Point and Figure chart of JPM, below, we can see a potential longer-term price target in the $49 area. This target may be too bearish, in my opinion.
Bottom line strategy: The stock price of JPM is still pointed down and the broad market has not put in a low yet - this means there is further risk. JPM could reach our first Point and Figure target of $87 but probably not the $49 price target from the weekly Point and Figure chart. Keep your powder dry and be nimble as a panic low could present itself in the next week or so. (Remember we are trading stocks and not the virus.)
(JP Morgan is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells JPM? Learn more now.)