Though underweight the banks as a group, I continue to maintain my long position in JPMorgan (JPM) . They report on Tuesday. Why did I not cut and run on this firm, as I had in the cases of both Citigroup (C) and Goldman Sachs (GS) (best out ever) earlier in the year? Simple. As a financial institution, JPM is best in class in my opinion. The stock is valued that way to versus the other big names in this space. Goldman, Citi, Wells Fargo (WFC) , and Morgan Stanley (MS) all run with single digit forward looking PE's. Besides being balance sheet sound, JPM stands atop the pile in terms of profit margin, PEG Ratios, and perhaps most importantly, price to book ratio. Oh, the firm also pays investors a 3.2% yield just to be there. This is the one name in the group that I will be willing to add to on a dip.
One thing we see in this chart is that though Relative Strength and the daily MACD both send better signals of late, Money Flow has gone nowhere. Fibonacci models suggest resistance in the $101 area regardless of whether the model that begins with the September high of the December cliff are used.
My personal plan would be to add anywhere in the low to mid-$90s on Monday if broad market weakness should allow. I will at this time cut my target price to $112 from the previous level of $114.
(An earlier version of this column appeared at 8:02 a.m. ET on Real Money, our premium site for active traders. Click here to get great columns like this from Stephen "Sarge" Guilfoyle, Jim Cramer and other experts throughout the market day.)