JPMorgan Chase & Co. (JPM) has broken nearby support, and a number of sell signals have appeared. Let's see what the charts say about this key financial and member of the Dow Jones Industrial Average (DJIA).
In this daily bar chart of JPM, below, we can see that prices of JPM declined sharply in the fourth quarter. It took just three months for the decline, and the past five months prices have not been able to best the zenith in the $118-$120 area from September.
Trading volume looks like it has declined the entire time since the end of December. JPM is below the rising 50-day average line today and touched the top of the declining 200-day average line.
The daily On-Balance-Volume (OBV) line declined from June to December, telling us that sellers of JPM were more aggressive. As prices recovered this year, the OBV line has remained neutral, suggesting buyers have not been aggressive on the rebound.
The trend-following Moving Average Convergence Divergence (MACD) oscillator crossed to a take profits sell signal at the beginning of May, and now it is close to crossing the zero line.
In this weekly bar chart of JPM, below, we can see a possible triple top pattern - three rally failures in the $115-$120 area.
The slope of the 40-week moving average line has been negative for several months, and the weekly OBV line shows a decline from early 2018. The declining OBV line tells us that sellers of JPM have been more aggressive for many months, suggesting a shift from strong hands to weak hands.
The MACD oscillator on this time frame is rolling over to a fresh, take profits sell signal.
In this point and figure chart of JPM, below, we have modified the settings to show the potential downside risk. The volume by price (or volume at price) bars show a lot of volume from $100 to $112.
A decline below $100 would put a large number of positions "under water," and at risk of losing money. This will be a strong incentive to sell.
Bottom line strategy: JPM is poised to break the 200-day moving average line and fill a gap from April. The lower prices go to, or below $100, the weaker the chart becomes. JPM could be making a major triple formation. Do not overstay your welcome.