close icon

JPMorgan: Risk is High After 10 Years of Bull Market

Between March 2000 and March 2009, JPMorgan Chase & Co. investors saw their holdings’ value decline by almost 78% as the stock fell from over $67 to less than $15 a share. The next ten years, on the other hand, have been a wonder to behold.

JPM stock rose like a phoenix from its ashes, climbing to over $119.30 per share by February 2018. This ~690% rally was supported by improving fundamentals in terms of rising profits and a strong balance sheet. As of this writing, the stock is not far away from its all-time high. It is fair to say that JPMorgan has never looked better.

Does this mean it is a good investment going forward? Usually, when all looks perfect complacency starts to settle in and the stage is set for an unpleasant surprise. In addition, the chart below provides an Elliott Wave reason for skepticism.

JPMorgan stock to complete an Elliott Wave impulse

The weekly chart above reveals JPMorgan’s entire uptrend from $14.96 in March 2009. It looks like a five-wave impulse, whose fifth wave is still under construction. Wave (1) – up to $48.20 – was followed by wave (2) down to the 61.8% Fibonacci level at $27.85.

The five sub-waves of wave (3) are also clearly visible. Wave 4 is a triangle, while wave 5 is the extended one among the three motive waves within wave (3). Wave (4) down has been developing during most of 2018 and culminated in the bottom at $91.11 in December.

Not the Time to Extrapolate JPMorgan ‘s Past into the Future

This brings us to wave (5), which we think is still unfolding. The recovery from $91.11 to $117.16 so far has a three-wave structure. This means wave (5) is likely going to be an ending diagonal pattern. Since truncated ending diagonals in fifth waves are extremely rare, it makes sense to expect a new all-time high above $120 in wave (5).

Unfortunately for JPMorgan bulls, when wave (5) exceeds the top of wave (3) the five-wave impulse which has been in progress since March 2009 would be completed. According to the theory, a three-wave correction follows every impulse. This means that instead of celebrating the new record high in wave (5), investors should prepare for a pullback towards the support area of wave (4) near $90 or lower.

Did you like this analysis? Similar Elliott Wave setups occur in the Forex, crypto and commodity markets, as well. Our Elliott Wave Video Course can teach you how to uncover them yourself!



Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

Privacy policy
You may also like:

MongoDB – Bearish Pattern Joins Nosebleed Valuation

MongoDB Inc. is a general purpose database platform developer and provider. The company was founded in 2007, but only came public ten years later – in 2017. During the following four years, the stock has risen from an IPO price of $33 to $515 a share as of last week. So, it is fair to…

Read More »

Pandora Does Things Right. Stock May Need a Breather

When we wrote our previous article on Danish jewelry maker Pandora in December, 2020, the stock was up over three-fold since March. That recovery from DKK 180 to DKK 651 didn’t not come out of the blue, though. It was the result of a bullish setup we managed to identify as early as July 2019.…

Read More »

Match ‘s SP500 Inclusion a Good Excuse to Reach $200

Match Group Inc. rose over 10% in post-market trading Friday following reports that it is going to be included in the S&P 500. The company, which owns Tinder, OkCupid and most other major dating apps in the U.S., has a market cap of over $41B. Despite the anticipated “summer of love”, though, this is not…

Read More »

Cameco Stock Seems to Have Finally Turned a Corner

Uranium spot prices are on the verge of breaking above $34/lb, up over 80% from the bottom of $18/lb reached in late-2016. Cameco, as one of the world’s top uranium producers, is now seeing its stock price rising in tandem. Yesterday, it closed at $19.16 after reaching $21.95 in June. We first covered Cameco in…

Read More »

A Fresh Look At Cigna ‘s Elliott Wave Super Cycle

In a case study article on Cigna, published in October, 2016, we examined how a fundamentally sound and undervalued stock can still drop nearly 90%. The reason for that crash didn’t lie in some company specific issue. Rather it happened to occur during the biggest financial crisis in 80 years. Nevertheless, we made the point…

Read More »

CBOE Takeover Rumor Lifts Stock to Elliott Wave Target

We first wrote about CBOE Global Markets less than eight months ago. The S&P 500 had already recouped all its COVID selloff losses and was hovering at new all-time highs. CBOE, in contrast, was still down 30% from its 2018 record, trading below $97 a share. For some reason, the market was ignoring the company’s…

Read More »

Ahead of Ulta Beauty ‘s 150% Gain Since Lockdown

Buying shares in a beauty retailer in March 2020 sounded like a crazy, stupid idea. Stock markets around the world were plunging at a record pace amid a global GDP crash resulting from government-enforced lockdowns. People were stockpiling necessities in preparations not to leave their homes in the foreseeable future. With COVID-19 cases rising everywhere,…

Read More »

More analyses