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 approaching resistance and the all-time high. This is following the gap up after the election. The RSI is rising in the bullish zone with the MACD positive and climbing. There is no resistance over 248. Support lower is at 241 and 236. The stock pays a dividend with an annual yield of 2.04% and has traded ex-dividend since October 4th.

The company is expected to report earnings next on a January 15th. The December options chain shows the biggest open interest at the 230 the 225 put strikes. On the call side it is biggest at the 240 then 230 strikes, both below price. The January chain covers the earnings report and has biggest open interest at the 201 and 200 put strikes. It grows from 200 to a peak at 250 on the call side. The February chain has open interest spread from 230 to 200 on the put side. It is focused at 255 and 250 on the call side.

JP Morgan, Ticker: $JPM

Trade Idea 1: Buy the stock on a move over 248 with a stop at 236.

Trade Idea 2: Buy the stock on a move over 248 and add a January 245/235 Put Spread ($3.85) while selling the January 265 Calls (2.85).

Trade Idea 3: Buy the December/January 260 Call Calendar ($2.30) and sell the January 220 Put ($2.00).

Trade Idea 4: Buy February 220/250/265 Call Spread Risk Reversal ($2.50).

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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 November options expiration in the books, saw equity markets show some weakness as they reacted to Chairman Powell’s comments about not being in a hurry to cut rates.

Elsewhere look for Gold to continue its pullback in the uptrend while Crude Oil consolidates at the bottom of a broad range. The US Dollar Index continues to drift to the upside while US Treasuries hold in consolidation. The Shanghai Composite looks to continue the short term move higher while Emerging Markets maintain their short term uptrend.

The Volatility Index looks to remain low making the path easier for equity markets to the upside. Their charts continue to look strong, especially on the longer timeframe. On the shorter timeframe the SPY, QQQ and IWM are all digesting the post-election euphoria and coming back to retest the breakouts. 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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