Jun 09

JP Morgan Rallies in an Incomplete Flat Pattern

JP Morgan Chase (JPM) soars on Monday session over 1.6%, climbing to $113.31 per share, boosted by investors’ expectations about the reopening of the US economic activity.

On the technical side, the Elliott wave perspective reveals that JPM runs in an incomplete regular flat pattern of Minute degree identified in black, which began on March 23rd.

 

JP Morgan’s big picture shown on its 2-hour chart illustrates an incomplete corrective structure of the upper degree. The bearish process, in progression, began once JPM topped at $141.09 per share on January 02nd. The first decline corresponding to wave A of Minor degree shows in its fifth wave of the wave ((c)) the course in an impulsive terminal formation, which resembles an ending diagonal pattern.

In the ending diagonal pattern, we distinguish that when JPM developed its wave v of Subminuette free degree in green, the sellers failed in their attempt to reach a new lower low. This failure led JP Morgan’s price to surpass the upper guideline of the diagonal that connects the end of waves ii and iv in green, validating the change of the intraday bias from bearish to bullish.

Once JP Morgan found fresh buyers at $78.10 per share, the new market participants boosted the price in a three-wave sequence of Minuette degree in blue until $104.32 a share. Following this completion, JPM retraced in another three-wave series driving the price to a retracement of 81% of Fibonacci. This retracement makes us suspect that JPM could be producing a regular flat pattern (3-3-5).

From the support, established at $82.43 per share on May 14th, JPM started a new rally that remains intact. Currently, JPM advances in its third wave of Minuette degree labeled in blue.

The thrust over the ascending channel (orange lines) and the RSI oscillator, which moves al level 78.51, leads us to conclude that JP Morgan is in an overbought stage. As a consequence, JPM’s stock price should start a consolidation structure before making a new upward movement.

In conclusion, our short-term outlook remains on the bullish side until the completion of wave ((c)) of Minute degree labeled in black. In the mid-term, after this completion, JPM should start a new downward movement corresponding to wave C of Minor degree identified in black.