Monday marks Columbus Day, which results in a bank and bond market holiday. However, it's not a holiday for the stock market, although it has turned out to be a snoozy trading session.
Given the less-than-thrilling action, investors are turning their attention to earnings, which are set to begin on Tuesday before the open. JPMorgan (JPM - Get Report) will lead things off for the banks Tuesday and Bank of America (BAC - Get Report) will follow up on Wednesday before the open.
By the end of the week, most of the large investment banks will have reported their quarterly results. The post-earnings reaction will be important in determining how these names trade into the end of the year.
Let's take a closer look at these popular bank stocks.
Trading JPMorgan Stock
JPMorgan is an exceptionally well-run bank, but that doesn't mean it always has a positive reaction to earnings. The stock did a good job bouncing from its 50-day moving average last week, and is now doing a solid job holding up above the $115 to $116 area.
However, short-term downtrend resistance (blue line) has kept a lid on JPM stock the past few days. After the report, let's see if JPM can close above downtrend resistance. A move above this level puts the recent high of $119.44 on the table, with a move over being $120 possible.
Should shares pull back, let's see if the 50-day can again act as support. If not, it likely puts the $110 level on deck, with the 200-day moving average being the downside target below that.
Trading Bank of America Stock
Bulls almost got a chance to reload on Bank of America stock earlier this month. However, BAC stock ended up bottoming near $27.16 -- less than a buck from vital range support near $26.25 -- then rebounding sharply higher.
Like JPMorgan, let's see if BofA can breakout over short-term downtrend resistance (blue line) and challenge its recent highs. Unlike JPM stock, though, BAC continues to be bound by range resistance near $30.50, rather than flirting with a move to new highs.
In short, a move over $29.50 puts range resistance at $30.50 on the table, with a move to $31+ being possible should BAC clear resistance.
On the downside, see if Bank of America's confluence of moving averages can support the name, between $28.14 and $28.60. Below uptrend support near $27.50 and the October low of $27.16 is on the table. Below that and support may give bulls an opportune risk/reward.