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Swing Trade Idea (JPM) – May 31, 2022

Market Outlook:

Equities may have formed a temporary bottom 2 weeks ago after the SPY quickly bounced higher from the $380 level and rallied with strong momentum last week, breaking above the 21 D EMA. Price action is very bullish after a break above the $404 level which provides evidence that a return to $428 is on the cards. The 10 year yield is also showing signs of consolidating near the 270 bps area after a strong rally to 320 bps and pullback. Looking at commodities, oil managed to break out after a multi-month consolidation period indicating that we may experience an oil rally this week. 

JPM Bullish Trade:
Our bullish trade idea is JP Morgan Chase & Co (JPM). JPM is part of the Financial sector that has experienced a strong decline this year so far despite the huge lift in yields. However, price is now trading well before the pre-pandemic drop area and recently broke above the $127 resistance level. The target price for this trade will be a quick bounce back to pre-pandemic resistance at $140.