Neal Razi's  Instablog

Neal Razi
Send Message
I am a value investor but with an emphasis on two things: Technicals and Dividends. This emphasis lets me play it safe and minimize my risk. Assuming a value stock is actually a good deal and not just a value trap, with many there eventually should come a chart pattern that shows that others are... More
  • JP Morgan Chase: Technical and fundamental recommendation 1 comment
    Jan 3, 2011 8:56 AM | about stocks: JPM

    JP Morgan Chase has been a stock on my watch list for some time due to its world class management and valuation. Recently a few technical indicators along with the fundamentals have caused me to recommend buying, and I thought I'd share my reasoning with the readers here at Seeking Alpha.
    First, I have thought JPM was in an ascending triangle for some time.

    Ascending Triangle: JPM

    You will notice that the stock hits near 41.50 4 times over 5 months before crashing through it Dec 22 on heavy volume. Also note the successively higher lows on each dip.
    Following the normal model of an ascending triangle leads to a possible price of approximately $47 on the breakout. To find the price target, add the difference between the breakout price and the lowest dip ($41.50 - $36 = 5.50) to the breakout ($41.50 + $5.50 = $47).
    Furthermore, this last week the candlestick chart showed an interesting formation.

    Close to a Rising Three Method

    It's very close to a "rising three methods" except that the final up day did not break a new high. Still, it's similar enough to warrant attention.
    I do not like to trade on technicals unless I can fall back on a stock as a good investment, and Chase looks very attractive to me at these levels. Morningstar has it at 4 stars and S&P at 5 stars with a target of $47, a 10% upside.  It's less than 12 times earnings and close to book value. Book should rise from these levels
    and they've been buying back billions of dollars of shares. They are reputedly ready to announce the reinstatement of their dividend.  All of which should lead to upwards price movement. Loan quality is rising, charge offs lessening, and they have been steadily releasing reserves.  Their investment bank division has even won an award for best IB recently.
    With all this in mind, I'd like to recommend that you think about adding Chase to your porfolio.  Thank you for reading.

    Disclosure: I am long JPM.
    Stocks: JPM
Back To Neal Razi's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (1)
Track new comments
  • donnyf
    , contributor
    Comment (1) | Send Message
    nice blog - we'll talk later
    14 Jan 2011, 09:17 AM Reply Like
Full index of posts »
Latest Followers


  • Time To Look At Utilities Starting With Consolidated Edison $ED
    Feb 10, 2014
  • S&P hit a hanging man today. Bullish signal. And despite the potential head and shoulders top, the S&P seems to be holding the neckline
    Aug 3, 2011
  • S&P 500 has a doji today. Might be nearing a bottom
    Jun 13, 2011
More »

Latest Comments

Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.