JPMorgan Chase & Co. (NYSE: JPM)

JPMorgan Chase & Co. operates as a financial services company worldwide. The Consumer & Community Banking segment offers deposit and investment products and services to consumers; lending, deposit, and cash management and payment solutions to small businesses; residential mortgages and home equity loans; and credit cards, payment services, payment processing services, auto loans and leases, and student loans. The Corporate & Investment Bank segment provides investment banking products and services. The Commercial Banking segment offers financial solutions, including lending, treasury, investment banking, and asset management to corporations, municipalities, and financial institutions. The Asset Management segment provides investment and wealth management services across various asset classes.

Take a look at the 1-year chart of JP (NYSE: JPM) below with my added notations:

1-year chart of JP (NYSE: JPM)

JPM has formed a relatively clear up-channel chart pattern over the last 4 months. A channel is simply formed through the combination of a trend line support that runs parallel to a trend line resistance. When it comes to channels, remember that any (3) points can start the channel, but a 4th point or more confirms it. You can see that JPM has 5 different points of channel resistance (red) or support (green).

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The Tale of the Tape: JPM has formed an up-channel. A long trade could be entered on a pullback down to the channel support, which currently sits near $64. Short opportunities would be on rallies up to channel resistance or on a break of channel support.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT

Follow me on Twitter: @cmtstockcoach