JP Morgan Is in a Well Structured Setup

Published on Friday, 03 August 2012 06:20 Written by TradersHuddle Wire

New York, August 3rd (TradersHuddle.com) - JP Morgan Chase & Co. (NYSE:JPM) closed the trading day at $35.17, near its 50 day and 200 day moving averages set at $34.62 and $36.79 respectively. JP Morgan's price action placed the stock above the 50 day moving average but below its 200 day moving average, providing a nice trading setup with clear reference points.

JPMorgan Chase & Co. (NYSE:JPM) provides global financial services and retail banking. The Company provides services such as investment banking, securities services, asset management, private banking, card member services, commercial banking, and home finance. JP Morgan Chase serves business enterprises, institutions, and individuals. JP Morgan, the second largest U.S. lender, was founded in 1823 and is headquartered in New York, NY.

JP Morgan seems to be setting up for a tight range between the 50 day moving average as support and the 200 day moving average serving as resistance.

A tiered approach appears to be the best way to maximize possible movements in the stock, as traders could establish a small position in JP Morgan and wait for the stock to break out above the 200 day moving average at $36.79. Then they could add to the position as momentum builds with the breakout. On the other hand, if support being referenced at the 50 day moving average set at $34.62 breaks, it could signal further downside for JP Morgan in the horizon.