JPMorgan Chase, Wells Fargo Have Momentum Among ‘Too Big To Fail’ Banks

 

NEW YORK (TheStreet) -- JPMorgan Chase  (JPM) and Wells Fargo (WFC) are the momentum stocks among the four "too big to fail" money center banks trading above their pre-banking crisis highs, while Bank of America (BAC) and Citigroup (C) are trading well below their 200-week simple moving averages.

Today we will look at the daily charts for these banking giants and provide key technical levels at which to buy on weakness and to sell on strength. Before we do, let's look at fresh data from the FDIC Quarterly Banking Profile for the first quarter of 2015, released last week.

According to the Federal Deposit Insurance Corporation, the banking system continues to heal from the adverse effects of the 2008 credit crunch. From top to bottom in size, 63% of the 6,419 FDIC-insured financial institution reported year-over-year growth in quarterly earnings and only 5.6% were unprofitable.

Stronger loan growth, improved noninterest income, increased trading revenue, and income from securitization and servicing of 1 to 4 family residential real estate loans contributed to operating revenue of $168.4 billion in the first quarter up 2.6% year over year. A drag on income was net income margin which contracted to 3.02% from 3.16% year over year.

Here's an asset scorecard for the banking giants. In total, the big four control 43.1% of the $15.78 trillion assets in the banking system, down from 43.3% in the fourth quarter of 2014 and 43.9% a year ago.

JPMorgan Chase controls 14.2% of the total assets in the banking system and continues to be the largest bank with $2.25 trillion in assets up 1.5% sequentially and 6.8% year over year.

Bank of America controls 10.3% of the total assets in the banking system and the second largest bank has $1.63 trillion in assets up 1.6% sequentially and down 1% year over year.

Wells Fargo controls 10.1% of the total assets in the banking system and the third largest bank has $1.6 trillion in assets up 2.5% sequentially and 11.2% year over year.

Citigroup controls 8.5% of the total assets in the banking system and the fourth largest bank has $1.34 trillion in assets down 1.5% sequentially and down 1.3% year over year.

Here's the daily chart for Bank of America.


Courtesy of MetaStock Xenith

Bank of America had a close of $16.50 on Friday down 7.8% so far in 2015 and is up 10% from its Jan. 16 low of $14.97. The stock is just above its 200-day simple moving average of $16.45 with the 50-day simple moving average of $15.97. Note how the stock has been trading back and forth around its 200-day since the price gap below it on April 28, 2014.

Investors looking to buy Bank of America should place a good till canceled limit order to purchase the stock if it drops to $15.70, which is a key level on technical charts until the end of June.

Investors looking to reduce holdings should place a good till canceled limit order to sell the stock if it rises to $19.05, which is a key level on technical charts until the end of June.

Here's the daily chart for Citigroup.


Courtesy of MetaStock Xenith

Citigroup had a close of $54.08 on Friday is down just 0.1% so far in 2015 and is up 16% from is Jan. 16 low of $46.60. The stock is above its 50-day and 200-day simple moving averages of $53.15 and $52.26, respectively. Note how the stock has been trading back and forth around its 200-day since the price gap below it on Jan. 24, 2014.

Investors looking to buy Citigroup should place a good till canceled limit order to purchase the stock if it drops to $42.49, which is a key level on technical charts until the end of June.

Investors looking to reduce holdings should place a good till canceled limit order to sell the stock if it rises to $56.26, which is a key level on technical charts until the end of June.

Here's the daily chart for JPMorgan Chase.


Courtesy of MetaStock Xenith

JP Morgan had a close of $65.78 on Friday up 5.1% year to date and is up 21% from its Feb. 2 low of $54.27. The stock has been above its 50-day and 200-day simple moving averages since March 27 with these averages now $63.29 and $60.53, respectively. The stock traded to an all-time intraday high of $67.18 on May 19. The prior high was $67.16 set in March 2000.

Investors looking to buy JP Morgan should place a good till canceled limit order to purchase the stock if it drops to $62.93, which is a key level on technical charts until the end of June.

Investors looking to reduce holdings should place a good till canceled limit order to sell the stock if it rises to $69.27, which is a key level on technical charts until the end of June.

Here's the daily chart for Wells Fargo.


Courtesy of MetaStock Xenith

Wells Fargo had a close of $55.96 on Friday up 2.1% year to date and up 11% from its Jan. 14 low of $50.42. The stock has been above its 200-day simple moving average since Jan. 20 and is currently above its 50-day and 200-day simple moving averages of $55.10 and $53.49, respectively. The stock traded to an all-time intraday high of $56.70 on May 19.

Investors looking to buy Wells Fargo should place a good till canceled limit order to purchase the stock if it drops to $53.07, which is a key level on technical charts until the end of June. A key monthly level of $57.13 provides a tighter level at which to sell on strength.

Investors looking to reduce holdings should place a good till canceled limit order to sell the stock if it rises to $62.07, which is a key level on technical charts until the end of June.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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