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 the all-time high from November and below the September high. It has a RSI rising in the bullish zone, but noting a bearish divergence in momentum should it not reach above the prior high, and a MACD positive and rising. There is no resistance above 322.50. Support lower is at 312 and 307. Short interest is low under 1%. The stock pays a dividend with an annual yield of 1.90% and has traded ex-dividend since October 6th.

The company is expected to report earnings next on January 13th. The December options chain shows biggest open interest at the 265 put strike then 275 and 295, and at 340 and 320 on the call side. In the January chain it is biggest at the 270 put and the 300 call, but then 320 above. Finally the February chain it is biggest at the 270 put and the 325 call strikes.

JP Morgan, Ticker: $JPM

Trade Idea 1: Buy the stock on a move over 319 with a stop at 307.

Trade Idea 2: Buy the stock on a move over 319 and add a January 310/295 ($4.70) Puts and sell the February 340 Calls ($4.30).

Trade Idea 3: Buy the December/January 320 Call Calendar ($5.25) while selling the January 310 Puts ($3.20).

Trade Idea 4: Buy the February 300/320/340 Call Spread Risk Reversal (90 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 with the first week of December in the books and the FOMC next week, saw equity markets show strength moving higher.

Elsewhere, look for Gold to continue the uptrend while Crude Oil holds lower in consolidation. The US Dollar Index continues the short term drift to the downside while US Treasuries continue in consolidation still teasing of a possible reversal higher. The Shanghai Composite looks to continue the uptrend after some digestion from the 10 year highs while Emerging Markets move up from support in their uptrend.

The Volatility Index looks to continue to hold in the normal range making it easier for equities to move higher. The charts of the SPY, the IWM and the QQQ look strong on the longer timeframe after reversals on the week. On the shorter timeframe the SPY and the QQQ have regained their swagger with higher short term highs, while the IWM leads the charge with a new all-time 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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