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8 Takeaways From JPMorgan's Chart

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Implied volatility on JPM options is near multi-year lows, which could be viewed as complacency.

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Below is a chart of JPMorgan (NYSE:JPM), which operates as a financial holding company, provides various financial services worldwide. Its Consumer and Community Banking segment provides deposits, investment products and services, lending, and cash management and payment solutions to consumers and small businesses; mortgage origination and servicing; and residential mortgages and home equity loans.


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Recommendation: Short Trade

What I Am Looking At:
  • $50 round number is a very significant level for shares going back eight years.
  • Up 10% year-to-date, may see shares stall at this level.
  • Peak call open interest for the May and June series resides at the 50-strike, may contribute to resistance.
  • Sentiment is optimistic as short interest represents a lowly 1.05% of the float.
  • 19 out of 23 analysts rate the shares a "buy" or better, potential for downgrades.
  • The 10-day buy-to-open call/put ratio stands at 1.48 indicating a preference among option participants for calls versus puts.
  • Implied volatility on JPM options is near multi-year lows, which could be viewed as complacency.
  • Quarterly revenue growth (year-over-year) is -8.7%.
Strategy: Possible target down to the 0% year-to-date level (pink line) coinciding with the 200-day moving average. Possible stop above March high.

This article by Tony Venosa, CMT, was originally published on Schaeffer's Investment Research.

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Twitter: @schaeffers
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No positions in stocks mentioned.
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