Potential Downtrend in JPMorgan JPMorgan Chase has rallied sharply in recent sessions, but some traders may see downside risk.
The first pattern on today’s chart is the series of lower highs and lower lows since mid-February. JPM is returning near the top of that descending channel. Could another lower high result?
Second, JPM is potentially stalling at the March 31 low of $237.36. Old support may have become new resistance.
Third, prices are stalling around the 21-day exponential moving average.
Next, economic sentiment has recently deteriorated. Mortgage rates are higher, consumer credit growth has slowed, business surveys have missed estimates and confidence measures have weakened. JPM responded by hiking loan-loss reserves in its latest quarterly report. Continuation of those trends may drag on the megabank’s fundamentals.
Finally, JPM is a highly active underlier in the options market, trading about 125,000 contracts per session in the last month. (It ranks 18th in the S&P 500, according to TradeStation data.) That could help traders take positions with calls and puts.
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