JPMorgan Chase’s Stock Is Rallying, But Is It Sustainable (Technical Analysis)

Summary:

• JPMorgan Chase & Co.’s stock price is currently in rally mode, with an approaching pullback expected.
• Fundamentals show a conservative growth plan for the stock price, which should keep it ahead of the upcoming recession.
• Other indicators appear to substantiate a growing JPMorgan stock price over the long run, but confirm a moderate expectation in the short run.

JPMorgan Chase & Co. (NYSE:JPM) is a leading bank within the U.S. for commercial and retail customers. While technical analysis shows how currently stock prices rallying, there is an expected pullback on price. Fundamentals suggest conservative growth over the coming years, which will positively impact the JPM stock price. Also, certain JPM executives have been selling their employer’s stock, indicating lower temporary pullbacks.

JPM Fundamentals are subdued

Growth

JPMorgan has had weak growth since 2017. However, it has been flat or even much weaker year-over-year between 2020 and 2021.

Unnamed: 0	2017	2018	2019	2020	2021
Period	FY	FY	FY	FY	FY
Revenue growth	0.035	0.102	0.061	0.033	0.018
Net income growth	-0.012	0.329	0.122	-0.200	0.659

Click to enlarge

Source: Financial Modelling Prep

Data

Simple moving average periods of 200 days are decent, considering many other extensive profile companies have been negative. However, a comparatively weaker 20-day SMA performance would be considered intermediate at best.

Unnamed: 0	Values
SMA20	4.68%
SMA50	12.93%
SMA200	6.91%

Click to enlarge

Source: FinViz

Enterprise

The enterprise level has been relatively conservative for this bank, where market cap growth has grown roughly 10% while stock performance has had some measurement of growth by nearly 25%.

Unnamed: 0	2017	2018	2019	2020	2021
Symbol	JPM	JPM	JPM	JPM	JPM
Stock price	115.110	104.410	135.890	128.670	146.610
Number of shares	3.552 B	3.396 B	3.221 B	3.082 B	3.022 B
Market capitalization	408.825 B	354.618 B	437.770 B	396.612 B	442.982 B
Add total debt	335.882 B	351.307 B	332.418 B	326.893 B	354.599 B
Minus cash and cash equivalents	430.121 B	278.793 B	263.631 B	527.609 B	740.834 B
Enterprise value	314.586 B	427.132 B	506.557 B	195.896 B	56.747 B

Click to enlarge

Source: Financial Modelling Prep

Estimate

Over the next three years, JPMorgan has set a very conservative growth path of 20% with a predicted flat performance in its stock. Net profit appears to be in line consistently over this time. As a result, do not expect superior growth in JPMorgan’s stock price.

YEARLY ESTIMATES	2022	2023	2024	2025
Revenue	128,780	140,212	143,174	150,482
Dividend	4.01	4.18	4.50	4.66
Dividend Yield (in %)	3.02 %	3.14 %	3.39 %	3.51 %
EPS	11.50	12.82	13.66	14.70
P/E Ratio	11.55	10.36	9.72	9.04
EBIT	50,977	57,252	58,517	66,006
EBITDA	–	–	–	–
Net Profit	34,873	38,114	39,735	41,657

Click to enlarge

Source: BusinessInsider.

Technical Analysis shows a coming pull after the quick rally

Fibonacci

One positive aspect of looking at this chart, the most recent stock price activity growth is shockingly strong. It is only a matter of time before confirmed entries can occur once the stock price crosses the trend line. However one can determine how fast the stock price grew last year, there’s also a reason for how steep the decline was. As the current stock price does rise with a strong slope, one is likely to see this continue once it crosses the Fibonacci trendline.

MACD

MACD chart shows that the stock price of JPMorgan has remained stable, as one might think. However, as hinted in the RSI, one needs to moderate expectations if they want to accumulate stock with the understanding that there could be a quick pullback in price.

RSI

As there has been strong momentum in the stock price of JPMorgan, one needs to be concerned as it already has broken through the overbought market condition of the relative strength indicator. Therefore, one can expect quick pullbacks compared to other events like this in 2020.

Prediction via AI

Monte Carlo

As high momentum builds in the stock price of JPMorgan, the predictive paths show the probability of stock price growth. This can also be shown in the normalized distribution, but price expectation for pullbacks is not revealed here.

Regression

As one can see in this 30-day forecast in the red regression line, the momentum of the stock price for JPMorgan seems to moderate somewhat. This can be confirmed by those who will expect the pullback based on the current condition of the RSI.

Risk Shows Uncertain Future Growth Story

Price vs. Short Volume

Short trading volume has been somewhat stable over the years compared to the overall trading volume for JPMorgan. As a result, only a few investors anticipate the need to short or take advantage of it, while there might be an expectation for a pullback based on the RSI.

Source: StockGrid.

Insider Stats

With the amount of confirmed selling by JPMorgan executives, they expect stock price pullback, so they start taking profit now while they can. Also, based on their forecasted guidance, it is no wonder they think the stock price may not have long-term momentum.

Unnamed: 0	X	Filing Date	Trading Date	Ticker	Insider	Title	Trade Type	Price	Quantity	Owned	Delta Own	Value
0	nan	2022-11-14 16:22:49	2022-11-10	JPM	Petno Douglas B	CEO Commercial Banking	S – Sale	$135.01	-5,139	396,548	-1%	-$693,831
1	nan	2022-11-14 16hope	2022-11-10	JPM	Scher Peter	Vice COB	S – Sale	$133.02	.-1,311	33,662	-4%	-$174,392
2	nan	2022-10-27 17:00:50	2022-10-26	JPM	Scher Peter	Vice COB	S – Sale	$125.02	-1,310	34,973	-4%	-$163,773
3	nan	2022-10-27 16:59:40	2022-10-26	JPM	Petno Douglas B	CEO Commercial Banking	S – Sale	$125.02	-5,139	403,197	-1%	-$642,456
4	nan	2022-10-27 16:58:32	2022-10-26	JPM	Leopold Robin	Head of HR	S – Sale	$125.07	-2,000	39,547	-5%	-$250,144
5	nan	2022-10-19 16:17:45	2022-10-18	JPM	Petno Douglas B	CEO Commercial Banking	S – Sale	$120.05	-5,140	408,336	-1%	-$617,055
6	nan	2022-10-18 16:24:36	2022-10-17	JPM	Erdoes Mary E.	CEO Asset, Wealth Management	S – Sale	$115.77	-33,515	533,795	-6%	-$3,880,135

Click to enlarge

Source: Open Insider.

Insider Activity

Date	Shares Traded	Shares Held	Price	Type	Option	Insider	Trade
2022-09-29	311.00	50,469.59	104.5	Buy	No	Korablina Elena A	311.0
2022-09-29	311.00	4,872.66	104.5	Buy	No	Korablina Elena A	311.0
2022-09-29	299.04	6,155.79	104.5	Buy	No	Korina Elena A	299.04
2022-10-16	104,603.00	706,450.00	46.58	Buy	No	Korablina Elena A	104603.0
2022-10-16	81,793.00	624,657.00	115.67	Sell	No	Petno Douglas B	-81793.0
2022-10-16	33,515.00	533,795.00	115.77	Sell	No	Erdoes Mary E.	-33515.0
2022-10-17	5,140.00	253,150.00	120.05	Sell	No	Pinto Daniel E	-5140.0
2022-10-24	881.00	19,892.00	nan	Buy	No	Pinto Daniel E	881.0
2022-10-24	825.00	20,717.00	nan	Buy	No	Rometty Virginia M	825.0
2022-10-24	499.00	20,218.00	122.08	Sell	No	NOVAKOVIC PHEBE N	-499.0
2022-10-24	500.00	19,718.00	122.08	Sell	No	NEAL MICHAEL A	-500.0
2022-10-25	1,310.00	34,973.00	125.02	Sell	No	BURKE STEPHEN B	-1310.0
2022-10-25	5,139.00	248,011.00	125.02	Sell	No	HOBSON MELLODY L	-5139.0
2022-10-25	2,000.00	19,031.00	125.07	Sell	No	FLYNN TIMOTHY PATRICK	-2000.0
2022-11-08	176,091.00	695,675.00	nan	Sell	No	HOBSON MELLODY L	-176091.0
2022-11-09	1,311.00	33,662.00	133.02	Sell	No	FLYNN TIMOTHY PATRICK	-1311.0
2022-11-09	5,139.00	242,872.00	135.01	Sell	No	BURKE STEPHEN B	-5139.0
2022-11-13	1,510.00	241,362.00	nan	Sell	No	Rometty Virginia M	-1510.0

Click to enlarge

Source: Business Insider.

Sustainability

JPMorgan shows a sustainability rating of average performance but will need to be worked upon to show authentic leadership in its industry.

Unnamed: 0	Value
Social score	16.18
Peer count	172
Governance score	11.73
Total esg	29.02
Highest controversy	3
ESG performance	AVG_PERF
Percentile	59.52
Environment score	1.11

Click to enlarge

Source: Yahoo Finance.

Recommendation

Based on the most recent stock performance, I agree on future growth over the next few months. This performance should continue over the years, but as said, expect moderate growth.

Interval	RECOMMENDATION	BUY	SELL	NEUTRAL
One month	NEUTRAL	10	7	9
One week	BUY	13	3	10
One day	BUY	11	5	10

Click to enlarge

Source: Trading View.

Price Target

Market analysts that have set price targets are for JPMorgan stock price. One positive aspect currently is how the stock price of JPMorgan has met the most recent market analyst target level.

Source: BusinessInsider.

Conclusion

As the stock price for JPMorgan has been relatively quick, as shown via the RSI, it is anticipated to have a temporary pullback. Over the long run for this bank, the stock price should continue to add a moderated level over the long run. Based on JPMorgan’s projected revenue over the next few years, the stock price will likely be muted concerning the subdued expectation. Despite a potential long-term recession, it might be wise to accumulate this bank stock, as JPMorgan Chase & Co. has shown to be profitable in the challenging year of 2022.

---

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

---