JPMorgan Chase & Co. Bumping Into Key Long-Term Resistance - Can It Break Through?
JP Morgan Chase & Co. (NYSE: JPM) has the bears thinking the good times may be over after running squarely into key “correction resistance” at $60.84. Only a breakout will shut the bears up this time around.
JP Morgan Chase & Co. shares have been on fire pretty much since the middle of 2012 and are only now just starting to run into some overhead supply.
A steady investment banking deal flow and strong equity markets are likely to bolster any of the major investment banks, JP Morgan included. The big question has to be whether the markets and the deal pipeline will remain strong.
Unlike Goldman or Morgan Stanley, though, money center banks like JP Morgan Chase, Bank of America and Citigroup all have heavy retail and commercial banking operations, complete with the traditional “bank” profit centers.
So much of the profits there depend on a nice spread between the short and the long ends of the yield curve. So far, so good on that front. Investors and traders alike, however, must be on the lookout for any flattening of the curve that may occur.
What The Technicians Are Saying About JPM…
The technical crowd says the fate of JPM shares depends entirely on what happens around this $60.84 resistance area. The broader market strength and still-strong outlook has the analysts believing more and more in the breakout scenario for JP Morgan.
However, unless and until that breakout occurs, there still exists the possibility of a failure at resistance and major turn lower in the shares of JPM.
If such a failure were to occur, however remote that possibility, the long-term downside target could be back down toward the historic lows in the $20s. Again, there is a very remote possibility of such a failure and turn down in this stock.
It looks like JPM may have to work a bit to eventually make it through, but odds are that the stock will eventually break through to the upside above the $60.84 key resistance level.
Right now, technicians are of the opinion that dips in JP Morgan down to around $52 - $53 should be bought. Just be sure to honor stops on any close below $52. Short selling can be done, they say, right near the $60.84 level with stops in place on any close above that level –- especially on a monthly closing basis.
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