Shares of JPMorgan (JPM - Get Report) were trading lower by more than 2% in Tuesday's morning session. That dip didn't last long though, with shares being bid higher in midday trading and closing higher by 1.1% to $115.12.
The move comes after JPMorgan beat on earnings and revenue expectations. Earnings of $2.82 per share came in 33 cents per share ahead of expectations. Revenue of $29.57 billion grew 4.2% vs. the same quarter a year ago and smashed estimates by more than $1 billion. Those are some strong headline numbers!
Making JPMorgan even more attractive is its capital return plans. A few weeks ago, it was reported that the bank plans to bump its quarterly dividend 12.5% from 80 cents per share to 90 cents per share, giving it a current yield of 3.1%. Management also received the green light from the Fed to buy back up to $29.4 billion worth of stock over the next four quarters.
Now we have to watch to see if the stock can breakout over long-time resistance.
Trading JPMorgan Stock
As you can see on the weekly chart above, JPMorgan stock has struggled with the $115 level. It has constantly butt its head up against it, but on a weekly basis, has rarely been able to close over this mark.
Over the last 18 months, this tough level of resistance has been a better spot to sell or trim a long position, than it has been to buy. But as the company's earnings, buyback and dividend all continue to increase, at some point this level should give way to higher prices.
Because of that, we're watching JPMorgan stock to see if it can break out over $115 and push higher. If it does, the 52-week high near $119.25 would be the first upside target. Above that and JPMorgan stock could go on a run.
I would love to see a breakout over $115 and a pullback to this level that holds as support. That will give buyers two things: A breakout confirmation and a low-risk entry on a new long position.
Should $115 remain resistance, I want to see either the 10-week moving average or uptrend-support level buoy JPM stock. Below those marks and I want to see if $110 can support the stock.