#202427 - priceactiontds - weekly update - JPMGood Day and I hope you are well.
JP Morgan / NYSE:JPM
comment: Clear bull wedge, which means buyers at new highs taking profits and since it's the third push up, the probability of a two legged correction breaking below the wedge is decent. Market touched the weekly 20ema 2 times over the past 3 months and the third time will probably happen soon. We also have a decent rejection at 210, which gives you even better odds for a short. I do think longer term shorts can work well, if you can hold 4-6 months until price reaches 185ish. Quicker short for 195, which is the most recent breakout price, is the safer play obviously. Once market hits the C target, I expect a lower high and then some stronger down move to below 190 over the next 6-12 months.
current market cycle: Bull trend which transitions into a trading range.
key levels: 190 - 210
bull case: Bulls see this recent bull trend inside the wedge as strong enough for a third leg. A measured move from W3 would lead to 220. For that to happen they want to stay inside the tight bull channel and turn the market around here quickly. I do think if it drops below 200, that bull trend is over and the high is in or at least a double top would not exceed it by more than 1-3$.
Bull Invalidation is below 200.
bear case: Bears want to keep the upper wedge line as resistance and test back down to the lower one around 196ish. They sold the previous highs for a 10% and a 7% drop. 10% down would bring us to 190, which is suprisingly around the weekly 20ema. Coincidences or math? You decide for yourself.
Bear Invalidation is above 215.
short term: bearish - Two legged correction to at least 200 over the next weeks.
medium-long term: bearish - Trading range 180-200, since we are at the highs, longer term shorts are reasonable.
current swing trade: Short 205, sl 215, tp 200ish or the lower bull wedge line/weekly 20ema
Have a good rest of your weekend and talk to you soon.
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