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JP Morgan, A Stock For The Next 5 Years

ByDragonfly Capital
AuthorGregory W. Harmon
Published 05/01/2013, 03:59 AM
Updated 05/14/2017, 06:45 AM

Starting the Month of May instead of selling and going away, how about a look at a potential long term holding so you can to buy and walk away? JP Morgan, JPM, might just be that stock. The Monthly chart below has many signals that suggest it could be starting a move back to the $80 range from 1999.

JPM
Start with the orange box. Outside of the financial crisis bounce from a Double Bottom, this range has held for over 10 years. This makes for a very powerful base to launch from once it does move out of the box. Moving to the far right hand side, the blue triangles represent the current pattern it is in, a Deep Crab. This is a bearish Pattern, but not until the Potential Reversal Zone at 61.04 is reached. It may be hard to reverse once it gets there, though. It also has a Measured Move higher to 67 from a similar move that brought it from the last low at 31 in June last year to the current consolidation. At either of those targets there is little prior price history to hold it back until the 1999 consolidation area between 75 and 85. Get in on a move over 50 and use a stop at 47, checking in every few months to adjust the stop. If you really want defined risk, consider buying the January 2015 50 Strike Calls now at about $4.00. If you are looking for a great cocktail party conversation starter, then also set up to sell Puts 10% out of the money 2 months ahead. So, June 43 Puts now, and you will likely recoup over 50% of your initial outlay by expiry.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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