JP Morgan Chase (JPM) NewsBite - JPM Falls on MS Earnings

Posted on Wednesday, June 18, 2008 10:05 AM
JP Morgan Chase (JPM) opened at $38.53. So far today the stock has hit a low of $38.04 and a high of $38.57. JPM is now trading at $38.28, down 0.76 (-1.95%). After hitting a one-year high of $50.99 last June, the stock hit a one-year low of $36.01 in March. Shares of JPM are declining this morning after competitor Morgan Stanley (MS) reported its second-quarter profit sunk 61 percent to $1.01 billion, or 95 cents per share, after paying preferred dividends. MS beat analysts' estimates of a 92 cent per-share profit, but only after raising $1.4 billion through asset sales, which could be a bad sign for the financial sector and JPM. Technical indicators for JPM are bearish and steady, while S&P gives the stock its highest 5 STARS (out of 5) strong buy rating. If you’re looking for a hedged play on this stock, consider a September bear-call credit spread above the $50 range. JPM hasn’t been above $50 since last summer and has shown resistance around $39 recently. This trade could be risky if the company's earnings (due out in mid-July) are a positive surprise, but even if that happens, this position could be protected by resistance JPM might find at its 200 day moving average, which is currently around $44 and falling. [LHF- Seven Summits Strategic Investments NewsBite]
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