JPM finds buyers at key support level
JP Morgan Chase & Co. (JPM) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, JPM finished the week -6.69% lower at 106.95 after losing $1.18 (-1.09%) today on high volume, significantly underperforming the Dow Jones (1.15%) following today's earnings report. Today's close at 106.95 marks the lowest recorded closing price since July 13th. Closing below Thursday's low at 107.38, JPMorgan confirmed its breakout through the previous session low after trading up to $1.78 below it intraday.
Daily Candlestick Chart (JPM as at Oct 12, 2018):
JPM reported earnings of $2.29 per share before today's market open. With analysts having expected an EPS of $2.24, JPMorgan Chase & Co. topped market expectations by 4.5%. The company's last earnings report was released on July 13, 2018, when JPMorgan Chase & Co. reported earnings of $2.29 per share topping market expectations by 3.2%.
Friday's trading range has been $5.23 (4.74%), that's far above the last trading month's daily average range of $2.15. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for JPM.
One bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 105.60 earlier during the day, the stock bounced off the key technical support level at 105.92 (S1). The failure to close below the support might increase that levels significance as support going forward. When prices bounced off a significant support level the last time on October 5th, JPM gained 0.61% on the following trading day. Prices are trading close to the key technical resistance level at 108.64 (R1).
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day though could signal a potential change in momentum that might lead to a correction back up towards the center of the Bollinger Bands at 114.33.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for JPMorgan. Out of 474 times, JPM closed higher 59.92% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 58.86% with an average market move of 0.77%.