Technician Leo Fasciocco, who focuses on stocks breaking out of resistance zones, is banking on JPMorgan (NYSE: JPM), as a breakout buy on its rise over $39. Here's the latest from Ticker Tape Digest.
"JPM is one of the dominant financial firms. It has 30 million consumer customers and the world's most prominent corporate, institutional and government clients.
"Recent tape action indicates good institutional buying interest. JPM's long-term chart shows the stock making a bottom around 15 in March. It has since rallied and double in price.
"Technically, there is heavy overhead resistance in the 40 to 50 zone. So, it will be important to see how JPM acts on a breakout.
"The daily chart shows a recent strong rally and the subsequent base formed between 32 and 38. The stock is now at the upper end of the base and in a good position to breakout.
"With strong profits expected this year and next, we see JPM as a good big cap stock to play if it can breakout free of its base at the $39 level. It is a breakout play most suitable for conservative investors.
"The accumulation-distribution line has been working higher. JPM is starting to benefit from an improvement in the housing market.
"For the year, analysts look for a 96% leap in net to $1.62 a share from 83 cents a year ago. The stock sells with a price-earnings ratio of 23. Going out to 2010, Wall Street projects an 84% leap in net to $2.99 a share from the anticipated $1.62 a share this year.
"JPM's stock is on the mend. We suggest accumulation of a partial stake in JPM with further buying to be done over 39. We are targeting JPM for a move to 48 after a breakout."
Steven Halpern's TheStockAdvisors.com offers a free daily overview of the favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.
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