VIDEO: Charting JPMorgan Chase Into Earnings

Ed Ponsi

Investment bank JPMorgan, symbol JPM on the New York Stock Exchange, is scheduled to report second quarter earnings on Tuesday, July 14 before the market opens. 

Consensus estimates have JPMorgan earning $1.19 per share during the quarter, on revenue of $27.12 billion. 

Before we take a closer look at JPMorgan, I'd like to provide some context by charting the entire banking sector. This is the current daily chart of the SPDR Bank ETF, symbol KBE, which is considered a bellwether for the U.S. banking sector.

KBE

As we can see, it's been a less-than ideal environment for banks. Low interest rates are cutting into bank profits, and the fear of defaults on business loans and consumer loans weight heavily on this sector. 

Now take a look at JPMorgan, below in blue, vs. the S&P 500 in green. Both JPM and the index suffered heavy losses as the COVID-19 pandemic crushed stocks. Notice how the S&P 500 has regained nearly all of its losses, while JPMorgan is lagging far behind. 

SPvsJPM

Now let's go to the chart of JPMorgan. The stock jumped by 5.5% on Friday, July 10, but hit an obstacle when it slammed into its 50 day moving average, in blue. 

In addition, JPMorgan is still trading well below its 200 day moving average, in red. That moving average acted as resistance on June 5th (black arrow). 

JPM

The bottom line: even though the overall market has been strong since late March, this stock has lagged the market. On the positive side, JPMorgan has outperformed the banking sector as a whole, as well as quite a few of its peers. 

Right now, JPMorgan is like a nice house in a rough neighborhood. When that neighborhood, which we call the banking sector, eventually comes back into favor, this stock should be one of its leaders. 

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