JP Morgan (JPM): Correction on the Horizon

JP Morgan (JPM) is back on our radar as the upcoming earnings season begins, with the banking sector leading the reports. We’ve analyzed JP Morgan before, and the current setup offers intriguing opportunities. Since 2023, the stock has maintained a steady upward trend that continues into 2024.

Currently, JPM appears to be in sub-wave ((iii)) within the larger wave (3) or possibly wave 5. However, we anticipate that sub-wave ((iv)) correction is yet to occur, aligning with the broader structural narrative of the chart.

Presently, the stock is trading near a critical trendline originating from the top of sub-wave ((i)). This trendline, which has shifted from resistance to support after multiple touchpoints, now risks being broken. Should it fail, the price could fall from its current level of $243 into a range between $204 and $173. A drop to $173 would represent the maximum correction in our view, while a more realistic pullback would fall within the $204 to $188 range.

On the bullish side, the wave 5 could push up to approximately $260, a modest increase from the current price. This scenario fits within the Elliott Wave framework, anticipating a wave ((iv)) correction before the final upward moves to complete wave 5 and the larger wave (3).