4 Trade Ideas for JP Morgan: Bonus Idea

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

JP Morgan, $JPM, comes into the week breaking resistance that held it for the past 5 months and at a 16 month high. The Bollinger Bands have shifted higher. The RSI is rising in the bullish zone with the MACD positive and crossing up. There is resistance at 148.75 and 153 then157.50 and 160.50 before a gap to fill to 168. Support lower comes at 144 and 141 then 138. Short interest is low under 1%. The stock pays a dividend with an annual yield of 2.75% and will begin trading ex-dividend July 5th.

The company is expected to report earnings next on July 14th. The July 14 expiry options chain shows the at-the-money straddle showing traders expect a $4.85 move by expiry. Open interest is biggest at the 137 strike on the put side and builds from 148 to 155 on the call side. The July chain has biggest open interest at the 140 then 145 strike on the put side. On the call side the 145 strike is biggest then 140 and 150. The August chain shows the 125 put as the biggest open interest. On the call side it is strong from 145 to 160.

JP Morgan, Ticker: $JPM

Trade Idea 1: Buy the stock on a move over 146 with a stop at 142.

Trade Idea 2: Buy the stock on a move over 146 and add a July 14 Expiry 145/140 Put Spread ($1.80) and sell an August 155 Call (85 cents).

Trade Idea 3 Buy the July 14 Expiry/August 150 Call Calendar ($1.40) while selling the July 140 Put ($1.12).

Trade Idea 4: Buy the August 140/150 Bullish Risk Reversal (free).

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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 the 2nd Quarter in the books, saw equity markets showed strength reversing the pull backs from the prior week.

Elsewhere look for Gold to continue its pullback while Crude Oil consolidates in the lower end of a broad range. The US Dollar Index continues to drift to the upside in consolidation while US Treasuries churn in their own consolidation range. The Shanghai Composite looks to continue the slow drift lower while Emerging Markets consolidate.

The Volatility Index looks to remain very low and stable making the path easier for equity markets to the upside. Their charts look strong, especially on the longer timeframe with the SPY and QQQ printing new cycle weekly highs. On the shorter timeframe the QQQ, SPY and IWM all erased last week’s losses with the SPY making a new 14 month high. 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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