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01 May 2018

JP Morgan Chase: Overview and Analysis

JP Morgan Chase & Co. is the largest bank in the United States in terms of assets. It is a multinational investment bank and financial services in company. Founded as the Bank of the Manhattan Company in 1799, the company got its present name from the merger of J.P. Morgan & Co. with Chase Manhattan Corporation.

The weekly chart above shows JPM stock has been in an uptrend for the entire period, as evidenced by the 50-day MA (blue line) being well above the 200-day MA (red line) for the entire period from January 2016 through April 2018. Bearish divergences were present in the MACD whenever the price moved higher than the $90 mark that was hit in March 2017, as in July 2017 and October 2017, suggesting a reversal of the trend might have been imminent. However, this trend reversal obviously did not develop.

The massive candle seen in November 2017 was due to the election of Donald Trump and the anticipation of the financial deregulation that he proposed during his campaign. The rise to $90 in March 2017 was part of a 300-point rally for the Dow after Donald Trump’s joint session to Congress. North Korea worries sent the whole stock market down a few days later. $90 would not be broached again until July on an impressive Q2 earnings release. The Q2 earnings beat the street by a margin of $1.82 to $1.59, or $0.23, per share. JP Morgan Chase rose along with the rest of the Dow to close above 25,000 in early 2018.

Future Stock Performance

J.P. Morgan has seen impressive earnings results over the past 18 months and has been a part of a financial sector that has pushed the Dow to record-high levels. If Donald Trump’s financial deregulation agenda, which is more of a vague feeling than a concrete plan, ever gets implemented, all the big banks, of which J.P. Morgan is the biggest, stand to benefit greatly.

The ascendancy of J.P. Morgan Chase’s stock seems to be unlimited, even by technical considerations like bearish divergences, which the stock blew right by during 2017. The stock has not been in oversold territory on the RSI for the entire span of the chart above and has not spent more than a few days under 50 on the RSI since the middle of 2016. This extremely strong uptrend seems to have no end in sight.