A positive reaction for PNC Financial (PNC) - Get PNC Financial Services Group, Inc. Report is helping, as the duo gives the bank stocks a lift. While Wells Fargo (WFC) - Get Wells Fargo & Company Report beat on earnings and revenue expectations, shares are down about 3% in midday Friday trading.
Will this be enough to allow JPMorgan stock to really rally? Over the last year, the bank (and the sector in general) has had a series of fizzled out rallies despite the overall market doing relatively well. After JPMorgan's earnings of $2.65 a share came in 30 cents ahead of estimates, and revenue of $29.85 billion came in $1.8 billion ahead of expectations, one would think that if there's ever a time for a continued rally, it's now.
JPMorgan and Goldman Sachs are holdings in Jim Cramer's Action Alerts PLUS member club.
The team said: As we look forward, management pointed out that equity underwriting fees should bounce back in the second quarter due the large number of U.S. IPOs. Remember, one way to play the slew of big IPOs this year are the big banks like JPMorgan and Goldman Sachs.
Want to be alerted before Jim Cramer buys or sells JPM or GS? Learn more now.
Trading JPMorgan Stock
So far, JPMorgan stock has pressed higher on Friday, which is a big deal as many bank stocks tend to gap higher on earnings before giving up their gains throughout the session (see Wells Fargo).
Shares of JPMorgan, Goldman Sachs (GS) - Get Goldman Sachs Group, Inc. (GS) Report , Bank of America (BAC) - Get Bank of America Corp Report and others were breaking out in mid-March, but cratered off that breakout on worries over an inverting yield curve. Those worries were short lived and we got a rebound in these stocks as a result. For JPMorgan, it brought the stock back to recent range resistance near $106 just before earnings.
Now vaulting higher, JPMorgan stock opened near channel resistance (purple line) and quickly pushed higher into the $110 to $112 area. This has been a zone of resistance over the past year and it will be interesting to see whether JPM can now push through. If it can, the $115 to $116 area will be on deck.
If JPMorgan stock can't get through this zone, I would love to see the backside of prior uptrend resistance hold as support. Should it fail as support, it would be encouraging to see JPMorgan stock hold the $108 level. While a pullback-and-hold to the $106 area/200-day moving average makes JPMorgan stock technically OK, it would be very discouraging to give up all of its post-earnings gains.
The bottom line? Let's see how JPMorgan stock handles $111 to $112. The best setup from here would be a continuation up to $115 resistance and a pullback into this current area that acts as support.
This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.