4 Trade Ideas for JP Morgan: Bonus Idea

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

JP Morgan, $JPM, rose off of a December bottom, retrenched in March and then continued to a top at the end of April. The pullback from there found support in May and reversed. It met resistance in July at the prior April high and reversed lower again. It has found support the past few weeks at the prior support level, building a channel. But Friday it pushed lower again.

The RSI is in the bearish zone with the MACD flat and negative, avoiding a cross up. The Bollinger Bands® have shifted lower as well. There is support at 104.65 and 102 before 101 and 99 then 92.25. Resistance above sits at 109.30 and 111 then 113 and 115.50 before 117. Short interest is low under 1%. The company is expected to report earnings next on October 15th. The stock pays a dividend with an annual yield of 3.02% and has been trading ex-dividend since July 3rd.

The August 30 Expiry options chain shows open interest centered on 108 on the put side but 112 on the call side. The September options chain shows large open interest at ‘the 5s’, biggest at 110 and 100 put and 110 and 115 on the call side. The October options are the first to cover the earnings report and show open interest build from 100 to a peak at 110 on the put side and from 105 to a peak at 115 on the call side.

JP Morgan, Ticker: $JPM

Trade Idea 1: Sell the stock short on a move under 104.50 with a stop at 106.75.

Trade Idea 2: Sell the stock short on a move under 104.50 and add a September 107 Call ($2.54) while selling the September 100 Put ($1.08) to fund some of the protection.

Trade Idea 3: Buy the September 104/October 100 Put Diagonal for a 5 cent credit.

Trade Idea 4: Buy the October 105/100-95 1×2 Put Spread for 55 cents.

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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 heading into the last week of August sees the equity markets have taken another body blow and are back at support.

Elsewhere look for Gold to continue in its uptrend while Crude Oil continues to move lower. The US Dollar Index looks to continue to drift higher while US Treasuries are pausing in their uptrend. The Shanghai Composite is giving a short term reversal higher while Emerging Markets continue to the downside.

Volatility continues to creep up keeping the bias lower for the equity index ETF’s SPY, IWM and QQQ. Their charts also show the SPY and QQQ continuing to move in tandem with the IWM weaker and lower. This has persisted since the December low. Use this information as you prepare for the coming week and trad’em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

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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