Shorts Hot To Test JPMorgan Shares Off Earnings-Driven, Pre-Market Trade

Jul.12.12 | About: JPMorgan Chase (JPM)

JPMorgan Chase (JPM) is due with its Q2 report in the pre-market Friday, July 13, and analysts polled by Capital IQ expect the firm to report a profit of $0.76 per share on revenue of $21.4 billion.

JPM consistently reacts to the upside in pre-market trade when the company reports its quarterly results, gaining ground ahead of the bell in 16 of the last 22 quarters we've tracked over the last six years. However, longs should be wary of expecting those early gains to extend throughout the day. In 10 of those 16 quarters, or 63% of the time, JPM has seen its earnings-driven pre-market gains narrow or reverse in the following regular session.

JPM hasn't seen much downside reaction to its quarterly reports in the pre-market, declining in six of the 22 quarters tracked and posting mixed follow-on regular session results: adding to its declines three times and narrowing or reversing its negative trade three times in the regular session.

Here's the historical performance data:

  • On April 13, 2012, JPM edged up 0.4% in pre-market trade after posting better-than-expected Q1 results. The stock lost its gains in that day's regular session, ending down 3.6%.
  • On Jan. 13, 2012, JPM shed 4.4% in pre-bell action after posting Q4 results in line with estimates. The stock cut its downside in that day's regular session, ending down 2.5%.
  • On Oct. 13, 2011, JPM declined 2% in pre-market trade after coming in with Q3 revenue ahead of expectations. The stock added to its negative trade in that day's regular session, closing down 4.8%.
  • On July 14, 2011, JPM advanced 3.7% in pre-bell action after beating Q2 expectations. The stock cut its upside in the follow-on regular session, ending up 1.8%.
  • On April 13, 2011, JPM gained 1.3% in pre-market trade after beating with Q1 results, hiking its dividend, and setting a new stock buyback plan. The gain evaporated in that day's regular session, with the stock ending down 0.8%.
  • On Jan. 14, 2011, JPM edged up 0.1% in pre-bell action after beating Q4 expectations. The stock firmed higher in the following regular session, closing with a 1% advance.
  • On Oct. 13, 2010, JPM gained 0.8% in pre-market trade after topping Q3 earnings estimates. The stock reversed direction in the regular session, ending down 1.4%.
  • On July 15, 2010, JPM gained 0.9% in pre-bell action after posting Q2 earnings up over year ago levels on lower revenue. The stock narrowed its upside in that day's regular session, ending up a thin 0.2%.
  • On April 15, 2010, the stock gained 3.4% in pre-market trading after a Q1 earnings beat. Shares were up a slightly stronger 4% during regular trading that day.
  • On Jan. 15, 2010, the stock fell 1% during early trading after an earnings and revenue miss. Shares fell 2.2% during regular trading.
  • On Oct. 14, 2009, JPM advanced 3.4% in pre-bell trade on the back of better-than-expected Q3 results. The stock narrowed its gains slightly in the following regular session, ending up about 3.3%.
  • On July 16, 2009, JPM declined 2.1% in pre-market trade despite reporting better-than-expected earnings results and revenue in line with expectations. The stock cut its downside in the follow-on regular session, ending July 16 bell-to-bell action off 0.3%.
  • On April 16, 2009, the stock gained 3.7% in pre-market trading after a profit beat. It closed the regular session up 2%.
  • In the pre-market of Jan. 15, 2009, the stock was up 2.7% after reporting a sharp drop in profit that beat the Street view. Shares reversed and fell 6% later that day.
  • On Oct. 15, 2008, JPM declined 2.3% in pre-market trade after reporting revenue shy of expectations. The stock headed deeper south in the following regular session, closing the day down 5.4%.
  • On July 17, 2008, the stock rose 5.7% during pre-market trading after JPM beat with its latest results. The stock closed regular trading up 13.5%.
  • On April 16, 2008, JPM gained 3.4% in pre-market trade after topping Q1 earnings expectations and just missing on revenue. The stock firmed higher in that day's regular session, rising 6.7% by the closing bell.
  • On Jan. 16, 2008, JPM advanced 3.1% in pre-market trade after topping Q4 revenue expectations and setting cautious guidance going forward. The stock added to its upside in the following regular session, closing the day up 5.7%.
  • In the Oct. 17, 2007 pre-market session, JPM rose 3.9% after topping Q3 expectations. Shares, however, eased back slightly in the regular session, ending up 2.8%.
  • On July 18, 2007, JPM lost 2.2% in the pre-market session despite beating Q2 estimates. It narrowed that loss slightly by ending the regular session down 2%.
  • On April 18, 2007, JPM edged up 2.6% on better-than-expected Q1 results and a $10 billion stock buyback program. Shares rose further during the regular session and closed up 3.7%.
  • On January 17, 2007, JPM firmed 0.4% after beating Q4 estimates. Shares inched slightly higher to end the regular session up 0.08%.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.