JP Morgan, $JPM, rose off of a December bottom, retrenched in March and then continued to a top at the end of April. The pullback from there found support in May and reversed. It met resistance in July at the prior April high and reversed lower again. It has found support the past few weeks at the prior support level, building a channel. But Friday it pushed lower again.
The RSI is in the bearish zone with the MACD flat and negative, avoiding a cross up. The Bollinger Bands® have shifted lower as well. There is support at 104.65 and 102 before 101 and 99 then 92.25. Resistance above sits at 109.30 and 111 then 113 and 115.50 before 117. Short interest is low under 1%. The company is expected to report earnings next on October 15th. The stock pays a dividend with an annual yield of 3.02% and has been trading ex-dividend since July 3rd.
The August 30 Expiry options chain shows open interest centered on 108 on the put side but 112 on the call side. The September options chain shows large open interest at ‘the 5s’, biggest at 110 and 100 put and 110 and 115 on the call side. The October options are the first to cover the earnings report and show open interest build from 100 to a peak at 110 on the put side and from 105 to a peak at 115 on the call side.
JP Morgan, Ticker: $JPM
Trade Idea 1: Sell the stock short on a move under 104.50 with a stop at 106.75.
Trade Idea 2: Sell the stock short on a move under 104.50 and add a September 107 Call ($2.54) while selling the September 100 Put ($1.08) to fund some of the protection.
Trade Idea 3: Buy the September 104/October 100 Put Diagonal for a 5 cent credit.
Trade Idea 4: Buy the October 105/100-95 1×2 Put Spread for 55 cents.
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