$JPM Bearish Setup Plays Out, Oversold Bounce Likely

SmartReversals
01-17

$JPMorgan Chase(JPM)$

The Weekly Compass called it as bearish last Saturday. Note the precision of the selloff following Friday’s daily shooting star candle and the subsequent loss of the $324 Central Weekly Level (CWL).

When price opened below the CWL on Monday, it validated a high-conviction short position. (As a reminder: investors can profit from downward moves through shorting just as they do from upward moves through long positions).

JPM hit our initial targets of $323, $317.7, and $310.8 in rapid succession. When a level is breached with such conviction, you can navigate the move by trailing your stops lower, using the “support-turned-resistance” levels as a guide.

Today JPM has reached oversold levels with an indecisive candle validated by high volume after a fantastic -6.5% weekly move that subscribers could monetize via shorting the stock or via put options. A technical bounce is likely here from the Point of Control of the Volume Shelf.

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