Of the big bank stocks to report earnings on Friday morning, JPMorgan Chase (JPM) is having the best reaction.
At last check, shares are up by about 7% in midday Friday trading as the stock goes for one of its best one-day performances in several years.
Citigroup (C) and Wells Fargo (WFC) also reported earnings this morning, with the former up about 4% and the latter down slightly on the day.
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While CEO Jamie Dimon cited “storm clouds” still on the horizon, the bank smashed earnings and revenue expectations for the current quarter.
That’s got investors in good spirits, as they continue to bid the stock higher even as the broader market experiences some weakness.
JPMorgan is often thought of as a best-in-class bank and so it’s no surprise it’s outperforming its peers this morning. It’s also not surprising that it’s shaking off the weakness caused by the regional banking worries in March.
Trading JPMorgan Stock on Earnings
Chart courtesy of TrendSpider.com
JPMorgan stock did well to hold the $125 area and 200-day moving average over the last month, following increased volatility on worries over the banking system.
However, the stock was stuck between $125 and $130. It took today’s post-earnings rally to break JPMorgan out of that range.
Not only that, but the stock also cleared the 61.8% retracement and regained the 50-day moving average in the process.
From here, that’s the area to hold on the downside. Bulls don’t want to see JPMorgan stock lose the $135 mark. Below that puts it below the two key aforementioned levels, as well as the post-earnings low.
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On the upside, they want to see shares push through the 78.6% retracement near $139.50. If it can do that and get back above $140, then it’s possible for the stock to retest notable resistance in the $143 to $144 zone.
How JPMorgan stock trades from here may be dependent on the rest of the bank sector (which will report earnings next week), as well as the overall market. It will be hard to sustain a rally if the S&P 500 starts to come under notable selling pressure.
For now though, the post-earnings rally is an encouraging sign for JPMorgan longs. See that the stock holds $135 on the downside and see if it can clear $140 on the upside.
