Technical Analysis – JPMorgan Chase range-trading continues; will there be first-mover advantage?
April 12, 2023 8:29 am
JPMorgan’s (JPM) recovery since the October 12, 2022 low of 101.54 was interrupted by the March banking shenanigans. The stock dropped aggressively towards the 125 area where it remains for the past 25 days. Despite the positive news regarding the failed US banks, JPM bulls did not manage to stage a comeback prompting questions about the short-term outlook of the stock.
JPM is actually hovering at a relatively busy area, revealing a fragile balance between market participants. This range-trading is depicted in both the Average Directional Movement index (ADX) and Bollinger Bands. The former indicates a deeply trendless market while the latter has tightened aggressively on the back of the reduced volatility. Some direction from the stochastic oscillator could be useful at this juncture, but this indicator is trading around its midpoint, confirming the extreme indecisiveness of the market. However, a break below its moving average could be the first sign of bearish pressure building up.
Should the bulls decide to take the market reins, they would face the 38.2% Fibonacci retracement of the October 25, 2021– October 12, 2022 downtrend at 128.74. Higher, the bulls would clearly have their work cut out at both the 135.11-135.45 range and the 137.14 level. The 50- and 100-day simple moving averages (SMAs) populate the former while the latter is defined by the 50% Fibonacci retracement.
On the other side, the bears would come against the 125.70-127.29 range set by the June 27, 2021 low and the 200-day SMA respectively, testing their resolve at this juncture. If successful in breaking this area, the path appears to be clear until the 118.34-119.24 range defined by the February 27, 2018 high and the 23.6% Fibonacci retracement.
To conclude, the bulls are trying to break the current fragile balance and stage a comeback, but they seem to lack the necessary determination.
JPMorgan’s (JPM) recovery since the October 12, 2022 low of 101.54 was interrupted by the March banking shenanigans. The stock dropped aggressively towards the 125 area where it remains for the past 25 days. Despite the positive news regarding the failed US banks, JPM bulls did not manage to stage a comeback prompting questions about the short-term outlook of the stock.
JPM is actually hovering at a relatively busy area, revealing a fragile balance between market participants. This range-trading is depicted in both the Average Directional Movement index (ADX) and Bollinger Bands. The former indicates a deeply trendless market while the latter has tightened aggressively on the back of the reduced volatility. Some direction from the stochastic oscillator could be useful at this juncture, but this indicator is trading around its midpoint, confirming the extreme indecisiveness of the market. However, a break below its moving average could be the first sign of bearish pressure building up.
Should the bulls decide to take the market reins, they would face the 38.2% Fibonacci retracement of the October 25, 2021– October 12, 2022 downtrend at 128.74. Higher, the bulls would clearly have their work cut out at both the 135.11-135.45 range and the 137.14 level. The 50- and 100-day simple moving averages (SMAs) populate the former while the latter is defined by the 50% Fibonacci retracement.
On the other side, the bears would come against the 125.70-127.29 range set by the June 27, 2021 low and the 200-day SMA respectively, testing their resolve at this juncture. If successful in breaking this area, the path appears to be clear until the 118.34-119.24 range defined by the February 27, 2018 high and the 23.6% Fibonacci retracement.
To conclude, the bulls are trying to break the current fragile balance and stage a comeback, but they seem to lack the necessary determination.
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