4 Trade Ideas for JP Morgan: Bonus Idea

• Posted by Greg Harmon
• on October 21st, 2019

Here is your Bonus Idea with links to the full Top Ten:

JP Morgan, $JPM, topped in September last year and then started to move lower. It found support finally at the end of December. Since then it has been rising in a broad path. Friday it closed at a new all-time high. The RSI is rising and bullish with the MACD pushing higher and positive. There is no resistance above 121.50. Support lower comes at 119.25 and 117.25 then 115.75. Short interest is low under 1%. The company reported earnings last week and is not expected to do so again until January 14, 2020. The stock pays a dividend with an annual yield of 2.99% and started trading ex-dividend on October 3rd.

The November options chain shows the largest open interest at the 110 and 115 strikes on the put side. It is biggest at 120 and 125 on the call side. December open interest is biggest at the 115 put but much bigger at both the 120 and 125 call strikes. Finally the January chain, the first to cover the next earnings report, has biggest open interest at the 100 and 110 put strikes and the 120 and 125 calls.

JP Morgan, Ticker: $JPM

Trade Idea 1: Buy the stock on a move over 121 with a stop at 119.

Trade Idea 2: Buy the stock on a move over 121 and add a November 120/115 Put Spread ($1.30) while selling the January 130 Calls (94 cents).

Trade Idea 3: Buy the November/January 125 Call Calendar ($1.90) and sell the November 115 Put (78 cents).

Trade Idea 4: Buy the January 110/125/130 Call Spread Risk Reversal (-$0.05).

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After reviewing over 1,000 charts, I have found some good setups for the week.  These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which with October options expiration complete, saw that equity markets had a solid week holding near recent highs with good moves higher.

Elsewhere look for Gold to continue to build its bull flag around 1500 while Crude Oil consolidates. The US Dollar Index continues to move lower while US Treasuries pullback in their uptrend. The Shanghai Composite looks to pullback in consolidation while Emerging Markets pull back in their short term move higher.

Volatility has eased and looks to remain low keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. The SPY and QQQ both broke higher to retest near the highs and look to continue to have an easier path higher. The IWM continues to churn in a wide consolidation though but put in the strongest week of the 3, perhaps finally ready to lead. Use this information as you prepare for the coming week and trad’em well.

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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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