JPM slides to lowest close since December 5, 2019
JP Morgan Chase & Co. (JPM) Technical Analysis Report for Jan 24, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, JPM ended the week -3.65% lower at 133.15 after tanking $3.39 (-2.48%) today, strongly underperforming the Dow Indu. (-0.58%). This is the biggest single-day loss in over five months. Today's close at 133.15 marks the lowest recorded closing price since December 5, 2019. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 134.72, the share confirmed its breakout through the previous session low after trading up to $2.40 below it intraday.
Daily Candlestick Chart (JPM as at Jan 24, 2020):
Friday's trading range has been $4.11 (3.01%), that's far above the last trading month's daily average range of $1.76. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for JPM.
One bearish candlestick pattern matches today's price action, the Black Candle.
The market closed below the 50-day moving average at 134.97 for the first time since October 8, 2019. When this moving average was crossed below the last time on October 8, 2019, JPM actually gained 0.72% on the following trading day. After having been unable to move above 136.74 in the prior session, JP Morgan ran into sellers again around the same price level today, failing to move higher than 136.43.
Crossing below the lower Bollinger Band for the first time since October 8, 2019, prices have shown unusually strong downward momentum in the short-term. This might either indicate a potential selling climax after which prices could head back up towards the mean of the Bollinger Bands at 137.58 or signal the beginning of a strong momentum breakout leading to even lower prices.
Though the stock is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed below the lower Bollinger Band" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for JP Morgan. Out of 69 times, JPM closed higher 63.77% 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 60.87% with an average market move of 1.22%.