JPMorgan shares had been trending lower on the longer-term charts but price had an opportunity to climb after the company’s earnings report was released. This brought share prices up to the 61.8% Fib on the latest swing high and low, also testing resistance at the 100 SMA.
The short-term SMA is below the longer-term 200 SMA so the path of least resistance is still to the downside. However, JPMorgan shares might have enough positive momentum to make a higher pullback to the descending trend line which is close to the 200 SMA dynamic inflection point.
Stochastic is also on the move up so buyers are still in control. Once the oscillator reaches the overbought region and turns lower, sellers could regain the upper hand and push it back down to the $52/share area. Further upside could lead to a test of $62/share.
The company posted $1.35 earnings per share versus the estimated $1.26 earnings per share, although analysts appear to have set the bar very low for banking companies in Q2. However, the earnings report also revealed that revenue fell 6.7% on costs to bad loans covering shale oil companies. In addition, revenue from trading and investment banking was down.
The bank’s net income fell to $5.52 billion in the first quarter ended March 31, from $5.91 billion a year earlier. Total revenue fell 3% to $24.08 billion, higher than the average estimate of $23.40 billion, while revenue from fixed-income trading fell 13.4% to $3.60 billion.
Other banking companies are set to print their earnings reports today and similar results could remind investors that the sector is still inherently weak. On the other hand, upbeat results could boost overall risk sentiment and JPMorgan shares.
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