If one sector has been best-positioned to take advantage of the rally in stocks, it's been financials. For a number of reasons, buying the financial sector is like a leveraged bet on the broad market, so it's no surprise that $200 billion bank JPMorgan Chase (JPM) has turned out market-beating performance in 2013. And you don't have to be an expert technical analyst to figure out what's going on from here.
JPMorgan has been in a textbook uptrend since mid-November, bouncing off of support and resistance all the way up. That uptrending channel provides a high-probability range for JPM's price action on the way up. And while you want to be a buyer in an uptrend, the ideal time to buy comes on a bounce off of support.Buying off a support bounce makes sense for two big reasons: it's the spot where shares have the furthest to move up before they hit resistance, and it's the spot where the risk is the least (because shares have the least room to move lower before you know you're wrong). If JPM catches a bid here, I'd suggest going long.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV