JPM has pulled back to its historically bullish 126-day moving average
Amid broad-market pressure, bank giant JPMorgan Chase & Co (NYSE:JPM) has pulled back sharply from its Feb. 19 record high of $280.25. After the stock's April 11 post-earnings pop, JPM preceded to give back that 8.1% gain all within the next week. Despite ceding its year-to-date breakeven level and nursing a 4.3% quarterly deficit, the pullback has JPM testing a historically bullish trendline.
The shares are within one standard deviation of their 260-day moving average, a trendline that, per Senior Quantitative Analyst Rocky White, JPM had encountered for the first time in at least eight of the last 10 trading days, after spending at least 75% of the last six months above it. Within these parameters, two other signals occurred in the past three years. JPM was higher one month later 100% of the time after these events, averaging a 6.7% gain.
The equity is still holding on to a 23.7% year-over-year gain. Plus, an unwinding of recent pessimism in the options pits could provide tailwinds as well. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), JPM's 10-day put/call volume ratio of 0.95 ranks higher than 91% of readings from the past year, showing puts being picked up at a much faster rate than usual.