JP Morgan recent impulsive up move looks overstretched

JPM at risk of multi-week mean reversion decline within major uptrend phase.

Medium-term technical outlook on JP Morgan Chase (JPM)

click to enlarge charts

Key Levels (1 to 3 weeks)

Pivot (key resistance): 136.50

Supports: 127.95 & 123.90

Next resistances: 142.60 & 146.50/147.80

Directional Bias (1 to 3 weeks)

JPM may see a corrective decline below 136.50 key medium-term pivotal resistance to target the supports at 127.95 and 123.90 before its impulsive up move sequence resumes within the major uptrend phase.

On the other hand, a clearance with a daily close above 136.50 invalidates the multi-week bearish scenario for the continuation of the rally to target the lower limit of the major resistance zone at 142.60 (Fibonacci expansion cluster & upper boundary of the major ascending channel from Feb 2016 low).

Key elements

  • Price action of JPM has gapped up on last Fri, 06 Dec and ended with two consecutive daily “Shooting Star” candlestick patterns which indicates a potential bullish exhaustion where the odds of a bearish reversal increases at this juncture.
  • The formation of the ‘Shooting Star” candlestick patterns has taken place right below the upper boundary of a medium-term ascending channel from 28 Aug 2019 low and a Fibonacci expansion cluster level at 136.50.
  • The daily RSI oscillator has formed a bearish divergence signal at its overbought region which suggests that medium-term upside momentum has started to wane.
  • The significant medium-term supports rest at 127.95 and 123.90 which are defined by the lower boundary of the medium-term ascending channel and the 23.6%/38.2% Fibonacci retracement of the recent rally from 03 Oct low to 06 Dec 2019 high.
  • The ratio charts of JPM against the market (S&P 500) and its sector (Financials) are indicating an “overstretched outperformance” condition for JPM.

Charts are from eSignal 


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.