JP Morgan (JPM) is a leading bank in the financial sector. Its share price is approaching Benjamin status (the $100 price level).

The last full-length article I wrote analyzing the company was  “Long-Term Trend Review for BAC, C & JPM“. I made the following comments while summarizing that article:

So do the charts of BAC, C & JPM have anything in common? They are all in uptrends with support areas below where additional purchases can be made to add shares to your portfolio.

All of the charts also provide for approximate 10% – 20% upside moves before their charts need to be re-analyzed.

Based on JPM’s share price at the time, that 20% potential upside move correlates with the price targets I calculated in my previous full-length article for JPM, which I wrote back in January 2017.

The January 2017 article was titled “1/29/2017 – JP Morgan Chase (JPM)“. In the article I calculated an upside price target range of $110 – $115 for JPM’s share price. I also made the following comment:

Any scale-in purchase below $85 and closer to the $80 area is a great opportunity to jump in on the uptrend.

It’s time to check in on the progress of JPM’s share price towards my price targets. And while I am at it, let’s see how some of my comments fared as well. Off to the charts!

JP Morgan (JPM)

This first chart for JP Morgan (JPM) is a 10 year weekly candlestick chart. I used weekly candlesticks instead of monthly candlesticks over the 10 years. A little more detail is sometimes helpful when placing Fibonacci Extension Tools on a chart.

I want to look long-term and evaluate JPM’s progress towards the $110 – $115 price target I calculated back in January 2017. Sometimes price targets can be tweaked after a little more price activity happens.

In my January 2017 update, I also mentioned that 1 more pullback was probable before JPM’s next leg up took place. Let’s see how I fared.

10 Year Weekly

I placed 4 different Fibonacci Extension Tools on the chart – a black, green, blue and purple tool. The purple tool is a medium-term tool while the rest provide for long-term price objectives. Focus on the confluence of lines from the green and purple Fibonacci Extension Tools when you look at the chart.

The first confluence area I want to discuss is the intersection of the green 100% Target Line and the purple 261.8% Target Line. That intersection was right around the $93.50 price area. JPM’s share price saw resistance at this confluence area but has not broken though.

Now that JPM’s share price broke above that resistance area, it appears to be headed to the next higher confluence area. The next higher confluence area for the green and purple Target Lines is in the $115 – $121 price range. I identified that range with the gray shaded box. I see that price target range as the highest probability of JPM’s minimum upside price. Look for a possible trade opportunity around the $102 price level though.

One of the main reasons I feel confident with JPM’s share price reaching the $121 price level? That price level represents the Golden Ratio for the green Fibonacci Extension Tool. I always look for the Golden Ratio trade.

Calculate Expected Return & Estimated Time Frame

One way to calculate an estimated time frame is with the Fibonacci Extension Tool. Since I think the $121 is the most probable price target, I will make some calculations based on the green Fibonacci Extension Tool.

With a $121.68 estimated price target, JPM’s share price has potential for an approximate 33% gain based on the current share price of $91.28. But how long is it going to take to earn that 33%? Let’s estimate the time frame. Start by counting the number of candlesticks in between Anchor Points #1 & #2. I switched over to a monthly candlestick view to make the counting a little easier. There are 46 candlesticks between anchor points #1 & #2. I’ve made some other calculation notes for the estimated timeframe on the chart itself.

The trendline to estimate when JPM’s share price will reach its Golden Ratio can also be used to make scale-in purchases or to repurchase shares that were sold on the way up to the $121 price level.

Based on the chart calculations, I calculate that JPM’s share price should reach its Golden Ratio no later than October 2019. That estimated date is a little over 2 years away. I say “no later than” because when a stock is reaching for its Golden Ratio it typically starts to ascend at a quicker rate than the preceding part of the uptrend.

So is a 33% return in basically 2 years ok for your portfolio? Remember, some of the above items are minimums that I am looking for. There potentially could be more upside to JPM’s share price that is not yet evident. A 33% return over a 2 year period breaks down to about 16% a year, not including dividends. JPM’s dividend currently yields about 2.14% according to Think or Swim.

JPM – Point & Figure

What do the Point & Figure charts have to say about price objectives? I’ve only included the Closing Point & Figure chart in this update.

The High/Low P&F Chart for JPM has a bullish price objective at $118, $3 higher than the above Closing P&F Chart. However having similar bullish price objectives for both the Closing and the High/Low P&F Charts give me greater confidence in the trade.

The Closing P&F Chart’s $115 bullish price objective and the High/Low P&F Chart’s $118 bullish price objective fit very nicely with my calculated price targets above.

JPM – Scale-In Entry

Back in the January 29, 2017 article, I stated that:

Any scale-in purchase below $85 and closer to the $80 area is a great opportunity to jump in on the uptrend.

This is a 9 month daily candlestick chart to look at the $80 – $85 buy-in area I recommended to purchase shares.

The $80-$85 preferred buy-in zone provided the support I was anticipating. There were a couple of opportunities to purchase shares in the zone since the article. I do not anticipate any more trips to the buy-in zone in the short-term. Rather, I anticipate JPM’s continued ascent and progress towards the $121 price level.

JP Morgan (JPM) – Summary

Not only is the $110 – $115 price range very probable, an upside price target of $121 appears likely based on the above analysis. Look for resistance around the $102 price area, something discussed in one of my previous JP Morgan (JPM) updates. A potential trade opportunity exists to sell shares around the $102 area and then repurchase those shares right around the current share price of $92. But that trade set-up should be re-analyzed as JPM’s share price is approaching the $102 price area.

In the meantime, you have to ask yourself this question:

With an approximate 33% gain over the next 2 years (excluding dividends), does JP Morgan (JPM) deserve a spot in my portfolio? The answer should probably be yes.

If you didn’t pick up shares in the $80-$85 preferred buy-zone, then the $90-$91 price area is a great spot to start with a scale-in purchase. Keep buying the dips until $102 is reached and then start to lighten your shares while still holding a core position.

There is a lot of information in the above analysis. I tried to outline my thought process on analyzing the charts a little better. But with so much technical information, I’m sure there are questions. Ask away below or in the Idea Chamber.

On deck: AMD

Good luck trading!