5 Big Stocks to Trade for Gains

JPMorgan Chase

It's been a solid year for shareholders in JPMorgan Chase (JPM). The $158 billion big bank has seen its shares rally more than 25% so far in 2012, despite a series of conspicuous missteps that made JPM a media punching bag earlier in the year. Now, the firm looks well-positioned to keep up its momentum.

The most important thing about the climb in JPM is that it's been orderly. Since the June correction in the S&P, JPM has managed to climb higher within an uptrending channel, a price area that's helped traders to identify the high probability moves in shares. The fact that JPM has successfully tested support four times without failing is a good sign -- it indicates that shares can still catch a bid underneath that trend line.

>>5 Big Trades From the Financial Sector

More significant, JPMorgan held up its own trend line support level when the S&P fell through its corresponding trend line. That relative strength is a very good sign for folks looking to buy now.

The ideal time to buy a stock in an uptrending channel is when it's as close to support as possible. For JPMorgan Chase, that time looks like now. Shares just staged a bounce off of support, and are starting to climb higher within the channel. If you decide to be a buyer here, I'd recommend keeping a protective stop in at the 50-day moving average.

I also featured JPMorgan recently in "5 Stocks Hedge Funds Hate -- But Should You?."

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