Target This Blue-Chip Bank Stock in December

JPMorgan Chase stock has generated impressive December returns over the past 10 years

Assistant Editor
Nov 30, 2021 at 1:41 PM
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We recently noted how well the banking sector has done so far this year, though that performance has been largely overshadowed by the energy sector. Still, Keycorp (KEY) just landed at the top of Schaeffer's Senior Quantitative Analyst Rocky White's list of best stocks to own in December. In fact, 12 of the equities listed are bank or financial services names, including JPMorgan Chase & Co. (NYSE:JPM), which ranked fifth on White's list. Averaging a 3.1% return, with 80% of returns positive, JPM stands out as the best Dow component to own this month. 

Though the stock was last seen down 1.4% at $159.10, a return of similar magnitude from its current perch would put JPM at $161.32. However, there is reason to believe JPMorgan Chase stock, which has added 34.4% year-over-year, could actually move even higher on the charts.

The equity just came within one standard deviation of its 200-day moving average, after a significant amount of time spent above this key trendline. According to additional data from White, five similar signals were observed over the last three years. JPM enjoyed a positive return one month later each time, averaging a 7.1% gain -- a move that would put JPMorgan Chase stock over $166, just shy of its Oct. 25 all-time high of $172.96.

JPM Chart Nov 30

Another key contrarian signal flashing for JPM is that options traders are targeting puts at the moment. The stock's Schaeffer's put/call open interest ratio (SOIR) of 1.27 stands in the 92nd percentile of its annual range, indicating near-term traders have rarely been more put-biased. An unwinding of this pessimism is sure to put wind at JPMorgan Chase stock's back.

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