Stock of the day: JP Morgan

We open a new week with analysis on JP Morgan, which I had previously mentioned at the end of August when the price was a near long-term high of around 163 USD. Of course, back then we were bullish, saying:

“Most recently, the price managed to break an important dynamic resistance (blue lines) and went further north. What’s more is that, in general, we have a very positive sentiment towards stocks (thanks to Jerome Powell). All that together allows us to think that the bullish wave will continue and the price will soon make new long-term highs.”

How did that work out? The price eventually did go higher, but in this case, you had to have a bit of patience. The price continued to go sideways inside of a triangle (orange) for the next several days. The bullish breakout from the triangle occurred at the end of September. The price surged higher but by mid-October, had fallen lower to test the broken upper line of the triangle as a support. The test was positive for buyers and the price rose again, setting new highs…also again.

Over the last few weeks, we’ve been experiencing a bearish correction, which is locked inside of the wedge pattern (black lines). And actually, this wedge is one of the reasons why we’re meeting here today. This wedge can be a very promising sign for buyers if we see the breakout of its upper line. So far, it’s a bit too early to say if we’ll have another upswing, but a breakout to the upside will significantly raise those chances. To the level that a further upswing will be almost certain.