Is JPMorgan Chase & Co. (JPM) on the Brink of a Breakout?

JPMorgan Chase & Co. (JPM) has historically outperformed in September

Sep 2, 2016 at 11:45 AM
facebook X logo linkedin

JPMorgan Chase & Co. (NYSE:JPM) is up 0.5% at $67.54 amid dimming rate-hike expectations, and has been stair-stepping higher for most of 2016. Since bottoming in early February, the bank stock has advanced a brow-raising 28.6%. And, from the looks of it, history is hinting at a near-term breakout for the shares.

Earlier this week, we took a look at the best stocks to own in September. Sure enough, JPM is on the list. The bank stock has been positive in eight of the past 10 Septembers, and on average, has gained over 2% during the month. A repeat performance would put the shares on the doorstep of their early November annual high, at $69.03.

With JPM trekking steadily higher in recent months, it comes as no surprise that options players have been buying to open calls over puts. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open 1.35 calls for every put during the past two weeks -- a ratio that outstrips two-thirds of all others from the past year.

Now seems to be a near-perfect time to purchase premium on short-term JPM options, too. Earlier, the stock's 30-day at-the-money implied volatility fell to an annual low of 14.9%. On top of that, the bank stock's Schaeffer's Volatility Index (SVI) of 17% rests in the bottom 9% of all readings from the past year, hinting at relatively muted short-term volatility expectations.

A couple of other factors could lift JPMorgan Chase & Co. (NYSE:JPM) shares, too, from a contrarian point of view. First, seven analysts still rate the bank stock a "hold" or worse, leaving room for potential upgrades. Second, short interest climbed nearly 26% to 31.7 million shares during the most recent reporting period, meaning there's sideline cash available for a possible short-squeeze situation.

Let us help you profit from market volatility. Target big gains in short order with a 30-day trial of Schaeffer's Weekly Volatility Trader!


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI