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 Operations Center. JPMorgan Chase and Co. is the largest bank in the United States I

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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

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%

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

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

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.

fibnonacci jpm

fibnonacci jpm (custom platform)

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.

macd jpm

macd jpm (custom platform)

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.

rsi jpm

rsi jpm (custom platform )

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.

montecarlo jpm

montecarlo jpm (custom platform)

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.

regression jpm

regression jpm (custom platform )

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.

short jpm

short jpm (custom platform)

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

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

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

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

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.

target jpm

target jpm (custom plafform)

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.


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