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Is JP Morgan Ready To Be Bought?

|Includes: JPMorgan Chase & Co. (JPM), XLF

The first part of the year gave us a clear signal that the Banks were coming out of a long awaited reversal pattern. The XLF gave us a clear sign in early January.

Two of the "Best of Breed" banks leading the charge were Wells Fargo (NYSE:WFC) and JP Morgan (NYSE:JPM). Today we're are going to choose JPM to take a closer look at. We are looking at this Best of Breed company to see if the time is right to start scaling into a position after the recent pull back.

We will be looking at 2 views of JPM a Weekly and the Daily. Looking back to early April JPM began a top pattern and began to pull back with of the rest of the market. Even though JPM declared great earning JPM was a sell the news in April Earning. This was to no surprise since several other bellwether companies were sell the news this earnings season.

As we let JPM continue to show us when the time is right we can see that on April 23 during a rather triple digit tape loss JPM was able to trade up a small gain. This 50 DMA bounce is significant and I would expect further follow through in JPM in the near term. But, as the chart shows JPM is broken right now, 44 is going to be difficult resistance to push through.

Looking at the Weekly chart we see an entirely different set of possible out comes. We see a stock that may still be in corrective mode. Until JPM prints a Black open box, caution still needs to be on the down side with JPM. We have not seen this possible reversal pattern yet.

So what to do? If your a longer term trader you need to stand aside s with JPM until we get a clearer weekly buy reversal pattern. If your a shorter term holder JPM should If your a shorter term holder JPM should have some follow through up to 44 but until JPM moves through 44 and holds buyers need to beware of further downside possibilities.

Disclosure: I am long JPM.