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:

Can Facebook ‘s Privacy Concerns Fulfill this Setup?

Facebook ‘s privacy policies are under the microscope once again. Personal e-mails uncovered during an FTC investigation reveal Mark Zuckerberg knew of the company’s problematic privacy practices. Facebook stock still hasn’t been able to fully recover from the crash in the second half of 2018, which dragged the price from $218.62 down to $123.02. How…

Read More »

SERV Stock Sets the Stage for a 40% Tumble

ServiceMaster Global Holdings, founded in 1929, is a cleaning and pest control company headquartered in Memphis, Tennessee. The company went public in 2014 and has delivered very generous returns for its shareholders since. SERV stock took off from $11.54 in August 2014 and climbed to as high as $56.50 earlier this month. A 390% total…

Read More »

IAC Stock ‘s Future May Not Resemble its Past

InterActiveCorp. or IAC for short, is a $19 billion media and internet services company. It is the controlling shareholder of Match Group, which in turn operates Tinder – the online dating app. IAC stock was beaten down heavily during the Financial Crisis. In March 2009, IAC stock fell to $13.23 a share, down 92.3% from…

Read More »

Humana Stock Bulls Haven’t Lost the Battle Yet

Humana (NYSE:HUM) climbed to an all-time high of $356 in early November 2018, following a rally from as low as $18.57 in March 2009. In less than ten years, the company rewarded the patience of its investors with a total return of over 1820%, not counting dividends. Unfortunately, the last six months were nothing like…

Read More »

T Rowe Price Vulnerable After Fibonacci Encounter

Founded in 1937 and based in Baltimore, Maryland, T Rowe Price is one of the largest asset management companies in the world. At the end of Q1 2019 its assets under management stood at $1.11T. That is T for trillion. Besides, T Rowe Price is also a public company which is why it is of…

Read More »

Momo Inc. – The Tinder of China Looks Promising

Based in Beijing, China, Momo Inc. operates a mobile-based social and entertainment platform. The company was founded in 2011 and became public in late-2014. The Tinder of China, as Momo is often referred to, first turned a profit in 2015 and has been enjoying strong earnings and revenue growth in the last three years. Momo…

Read More »

TTD Stock: Don’t Let that 8-fold Surge Seduce You

The Trade Desk Inc. provides a self-service omni-channel software platform enabling clients to purchase and manage data-driven digital advertising campaigns. TTD stock is trading on NASDAQ since September 2016. In less than three years, the shares have surged from the IPO price of $28.75 to over $232 earlier this month. Early investors have managed to…

Read More »

More analyses