Investors have had a busy week and will likely want the long three-day holiday weekend to recoup. That’s to digest the monthly inflation report on Thursday and the bank-earnings kickoff on Friday.
The inflation report was in line with expectations, resulting in a mixed trading session for stocks.
On Friday, the stock market opened lower as JPMorgan (JPM), Bank of America (BAC), Wells Fargo (WFC), Citigroup (C) and others reported their fourth-quarter results.
All four stocks opened lower, too. Let’s look at the charts for a couple of these stocks now.
Trading JPMorgan Stock on Earnings
Chart courtesy of TrendSpider.com
For JPMorgan, the bank delivered a top- and bottom-line earnings beat and said the economy was strong. But management did note that a recession is likely in the cards.
The shares opened 2.8% lower, fell as much as 3.3% and at last check were up 2%.
On the weekly chart there's a stunning five-week surge off the 2022 low and the $105 gap-fill level. That was followed by a constructive pullback to the 10-week moving average, and JPMorgan is now working on its fourth straight weekly gain as it rallies off this level.
With the rally, the shares are clearing the December high and fourth-quarter high at $138.66. That has me shifting my focus up to the 61.8% retracement near $145, then the prior support level near $150.
Above that and $157.50 is in play.
On the downside, I am keeping a close eye on the $137 to $138.50 area. A break below this zone puts JPMorgan stock back below prior resistance, as well as the December and fourth-quarter high.
So long as JPMorgan stock is above these measures, the bulls remain in control for the short-term.
Trading Wells Fargo Stock on Earnings
Chart courtesy of TrendSpider.com
In the case of Wells Fargo, the company beat on earnings, missed on revenue and will “set aside a larger portion of its reserves to compensate for rising loan risks as interest rates rise and the economy slows,” as noted by TheStreet’s Martin Baccardax.
WFC shares opened lower by 3.4%, rallied back and at last check were ticking just into the green.
The stock continues to hold the 200-month moving average and uptrend support (blue line). But it’s struggling to regain the 10-week and 21-week measures, as well as the weekly VWAP measures on the upside.
If the stock can clear $45 — and thus, all those levels listed above, plus the 50-week moving average and the 50% retracement — that opens the door up to $48. Above $48 and the $50 to $51 zone is back on the table, followed by $55.
On the downside, $40 should be considered a must-hold level for the bulls.
