I am beginning to have (short) sellers remorse regarding JP Morgan. We shorted 50 shares, or a half position at $47.20 in anticipation of SLV rocketing past $50.00. Silver ran into a brick wall at $50, but JP Morgan is still steadily sinking. That is why we use charts.
A casual glance at the daily chart shows that Morgan has given back all it's gains of 2011 and has closed ominously below $43 support level. Notice the series of three lower highs at $48.36, $47.64 and $46. That defines a downtrend and that trend will accelerate if the $42 level is seriously breached. I was not surprised to see the shares rebound to $46, but will be surprised to see JPM give up the strong $42 support especially with the 200 dma currently poised at $41.87. I do think JPM will break $42.00, but not on it's first try. So, what now?
Well we have four points of profit and I think the thing to do is to move our stops down rather than go all in. The intra-day chart is not at all revealing with respect to a good place to put stops in so, we will move them down to $43.89, just above yesterday's high.
Short JPM @ $47.20
Buy Stop @ $43.89
Buy Stop @ $43.89
No comments:
Post a Comment