I just closed a bearish position on this one and am jumping back in as it gets to resistance. I am basing resistance on the level of the “island reversal” that appeared at the end of October. I am extremely skeptical that JPM can get over the hurdle regardless of market direction.
I am buying a little extra time in this case because I would not be surprised to see prices consolidate around $34-35 for a few days while we wait for earnings season to kick off.
To the downside I think $28 is possible but $30 more likely as the point where I would close a profitable position. Depending on what is going on at the time I think closing on a break of the island reversal’s gap would be a good time to cut losses.
Option Trade Details:
| The Ticker: | JPM | 5.0 (3 votes) |
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| The Trade: | Buy to Open Mar 2012 31 Puts at 1.10 or better. |
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| Target Price: | $2.20 per share |
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8 Responses to Round Two Against the Banks – JPM
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Hi John – are you taking profits on your JPM puts today or holding for further downside?
I think I am going to let it run a little. It might be interesting to see what happens after the BAC report.
hey John, am liking the nice gap around $33.00? Let’s hope it gets filled for ya
Or better still the lower one if we have panic in the markets LOL Seems to be a similar sort of gap about $5.50ish on the BAC chart too which looks around about the same spot on the chart as the gap on JPM… here’s hoping the gaps act as vaccuums with the downgrades and potential turmoil in Europe.
Yeah me too, but these banks have been incredibly contrarian so I still think this is a very high risk position. The other side of the coin however, is that a break should be HUGE.
The strength in U.S. financial stocks is totally mystifying. However, I am pretty optimistic (about my trade not profits) heading into earnings this week. Seems like expectations are totally out of control.
Ah man! That is just so mean… The only substantial short position I decide to keep around after indices breaking above MAs are in banks … and then THIS today? BAC/C/RealEstate exploding – as just about the only thing. I was hoping it would be a brief short squeeze but it just goes on so someone is SERIOUS about these banks. And I think this “Christmas rally” is starting to look a bit tired by now (1293′ish S&P resistance still looks like a brick wall). Although it does looks like big money continues to be moved to different sectors, from defensive (utility/stables/telecom). But why into financials? What happened last week (5-6th) that started this wildfire I wonder (my broker upgraded several of these mega banks)… I am not too happy about this paper loss, but at the same time, I had promised myself to hold until JPM reports and the banks early next week. However, why this massive buying power when everyone expect them to continue with red numbers. “Mystified” is the word!
Downgrades of GS today put some sell pressure on the rest of the banks. JPM’s uptrend strength died into the close today, and ROC plunged into the negative. Good setup for a move to the downside from here.
Looking forward to hearing your thoughts on this trade in tonight’s ATE