PreMarket Prep Stock Of The Day: JPMorgan Chase Kicks Off Q3 Earnings Season

If the price action in JPMorgan Chase JPM is any indication of how issues are going to be treated after a mixed earnings report, then buckle your seatbelts.

Unusual Move: It hasn't been since February, when the issue rallied that month on a closing basis from $128.67 to $147.17, has the bank has caught a strong bid. Instead, it meandered in a trading range between $146-$167 until Sept. 20.

On that day, it bottomed at $150.49 and embarked on an amazing 13-day rally. Over that course of time, it traded higher in nine of the next 13 sessions. Also, in only one of the down sessions was the decline significant, falling from $165.95 to $163.69 on Sept. 30.

Dreaded Triple-Top: One of the most basic technical formations is a triple top, when a trading instrument makes three highs in a well-defined area.
It doesn't necessarily have to be in consecutive sessions, but when it does it signals a firm seller(s) at that level.

With respect to JPMorgan, it came in three consecutive sessions, Oct. 7 ($171.51), Oct. 8 ($171.24), and Oct. 11 ($171.29). Its all-time closing high was posted Oct. 8 at $170.22.

Sellers Into The Report: After such an unusual rally in a short period of time, profit-takers came into the issue ahead of the report. That coupled with overall weakness in the S&P 500 over the last few days contributed to a decline as the issue ended Tuesday’s session at $165.36.

Before the open, the company reported quarterly earnings of $3.74 per share, which beat the estimate of $3 per share. The company reported quarterly net revenue of $29.65 billion and managed net revenue of $30.441 billion.

The revenue decline was attributed to the lower non-interest revenue from coming off pandemic-initiated borrowing and the normalization of investment banking.

PreMarket Prep Take: When the issue was being covered on the show, it was trading at the $166.40 area, which was near the high of the premarket session ($166.70). Co-host Dennis Dick wasn't that interested in the premarket action and was waiting to see how the big money came in off the open.

The author of this article wasn't optimistic about a rally. The reason is that the issue had a big rally ahead of the report and buyers were not being super aggressive in the premarket. From observing the price thus far, the author put it simplest terms, “the Street does not like this report."

The full discussion on the issue from Wednesday’s show can be found here:

Price Action: After a lower open, the issue rallied but found sellers just above Tuesday’s close ($165.36) at $165.41 and reversed course. As of 12 p.m., the ensuing decline took the issue to $160.60 and rebounded back into the $161 handle.

Photo: Joe Mabel on Wikimedia