JPMorgan Chase (JPM) shares plummeted more than 5% on Tuesday, marking their largest single-day decline since June 2020. This drop followed comments from the bank’s president who criticized Wall Street’s overly optimistic projections for net interest income and expenses in 2025, in light of anticipated interest rate cuts and persistent inflation.
Year-to-Date Performance and Recent Trends
Despite Tuesday’s sharp decline, JPMorgan’s stock has gained approximately 21% since the beginning of the year. The bank has benefited from high lending rates throughout 2024, which have allowed it to achieve favorable yields between the interest paid to depositors and the returns from lending and investments.
Technical Analysis and Recent Stock Behavior
September Selling Trends
JPMorgan’s stock had been trending upward within an ascending channel since early April, establishing clear support and resistance levels. However, a late-August rally that reached the channel’s upper trendline, coupled with an overbought relative strength index (RSI) and a new record high, marked a critical turning point.
Since the beginning of September, selling pressure has increased. Tuesday’s decline, which occurred on the highest trading volume since mid-April, indicates substantial activity by larger market participants, including institutional investors and pension funds. The stock closed at $205.56 on Tuesday, down 5.2%.
Key Lower Price Levels to Watch
Looking forward, investors should keep an eye on three significant lower price levels on JPMorgan’s chart if the selling trend persists:
$200 Level: This level is near the lower trendline of the ascending channel and may also provide support from a trendline connecting the early April swing high with recent trading levels. A decline below this support could lead to further drops.
$191 Level: If the stock falls below $200, it may revisit the $191 level, which coincides with a brief consolidation period from the stock’s trending move between October and March. This area also aligns with the lows from May, June, and August, as well as the 200-day moving average.
$180 Level: A more significant correction could see shares decline to around $180, where support is likely to be found near the mid-April pullback low. This would represent a 12% drop from Tuesday’s closing price.
Potential for Recovery
Should JPMorgan shares rebound, investors should monitor the price’s reaction to the ascending channel’s upper trendline, currently around $227. A breakout above this level, supported by strong trading volume, could signal a resumption of the stock’s longer-term uptrend.
Conclusion
The recent decline in JPMorgan Chase shares reflects market concerns over future earnings and expenses, driven by broader economic factors. Investors should closely track key support levels and potential breakout points to navigate the stock’s future movements and make informed investment decisions.
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