Long on JPM after stress test and possible announcement buybacks
JPM is one of the banks that passed the Fed's stress tests with flying colors- rather than GS who almost missed the leverage ratio of 3% by just .1%. JPM has been in a descending wedge after its recent all time high this past Feb. It has also quadruple bottomed at a price of around $105, providing strong support. The RSI is testing oversold levels but the MACD is not clearing indicating a bearish or bullish future. However, the bollinger bands indicate high volatility- something I need for an event trade with a week long time horizon. I am considering going long through call options for a quick short term trade. The fed will announce this week if they will allow big banks to substantially increase dividends and engage in stock buybacks. History tells us that if this announcement goes my way, the price will spike.
It seems like a stop loss is required here. The price is testing support at $105- if it dips beneath, it will go under the 200 day moving average and will not find another support level until $102.5 and $97.
Please comment your thoughts/questions below.
It seems like a stop loss is required here. The price is testing support at $105- if it dips beneath, it will go under the 200 day moving average and will not find another support level until $102.5 and $97.
Please comment your thoughts/questions below.
Trade active
Will place an order for call options pre-market on Monday. Will likely buy longer term options to reduce impact of time value depreciation, but will still sell post Fed's announcement.
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