In the end of April, the JP Morgan Chace & Co stock (NYSE: JPM) reached a new high for 2019, which was at 117.15, and after that it reversed to the downside. But the slide lasted only for about a month, as investors started jumping back into the stock. The price accelerated and, once again, hit the area of the highest point of 2019, but was not able to push further above it. This was reached in the end of July and from then onwards, the stock started sliding, which led to a break of the medium-term upside support line taken from the low of December 26th. Certainly, such a move raises scepticism about the upside in the short run, but before we could start examining further declines, we will wait for a clear break below one of our key support areas and only then aim further south.
Yesterday, the stock found good support, at 105.91, which is not far from May’s lowest point of 105.09. If, eventually, the 105.09 hurdle fails to keep the price up, a break of it could open the door to some further declines, as more investors may start liquidating a few of their positions. We will then examine the 102.20 obstacle, a break of which may clear the way to the 100.56 zone, marked by the high of March 25th and by the low of March 29th. We could see the stock getting a hold-up around there, which could lead to a small bounce towards 102.20. But if there are still no new buyers at that price, JPM might reverse to the downside again, possibly fall below the 100.56 area and end up testing the 98.09 level. That level marks the lowest point of March.
Our oscillators, the RSI and the MACD, are giving us somewhat mixed signals. Although the RSI is below 50 and is close to our oversold territory, at 20, the indicator is showing a few signs of bottoming. The MACD, on the other hand, is below zero and its trigger line, and also points to the downside, which supports our main scenario, for now.
If, by any chance, the price crawls back above the aforementioned upside support line and also moves above the 110.97 barrier, marked by this week’s high, this could spark some interest among new investors. This might increase JPM’s chances of moving higher again and we may then aim for the 113.42 obstacle, a break of which could send it to the 114.74 hurdle, marked by the low of July 30th. We will be very cautious around that hurdle, as it may force the price to stall, or even correct back down a bit. That said, as long as the stock stays above the aforementioned upside support line, any throwback could be classed as a temporary correction before another leg of buying. A strong push above the 114.74 barrier may open the door to a move to the previously-discussed 117.15 level, which is near the highest point of this year, so far.
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