Bank on JPMorgan Breaking to More New Highs

by Sam Collins | January 6, 2014 7:30 am

JPMorgan Chase (JPM[1]) — This global financial services company has assets of nearly $2.5 trillion and operates in over 50 countries. Although S&P expects earnings for 2013 to fall to $4.41 versus $5.20 in 2012, they are projected to increase to $5.96 in 2014, assuming a net reduction in shares from a share repurchase plan. JPM’s earnings are expected to increase from an expanding capital markets business that should benefit from a European recovery, a strong asset management business, and expanding income from its U.S. branch network.

S&P anticipates the company will raise its common stock dividend and share repurchase plan in March. Based on fundamental analysis, its analysts have a 12-month target price of $65. The yield is currently 2.6% based on an annual dividend of $1.52 per share.

In May, JPM broke from a consolidation to form a new bull channel that held throughout the year. In November and December, buying volume increased, and the stock broke to a new high on Friday and appears capable of sustaining a breakout to a trading target of $64.

The breakout is supported by twin buy signals from my proprietary internal indicator, the Collins-Bollinger Reversal (CBR), along with a bullish MACD. JPM is also suitable for investors with a long-term objective of growth and income.

JPM Chart
Click to Enlarge

Chart Key[2]

Endnotes:
  1. JPM: http://studio-5.financialcontent.com/investplace/quote?Symbol=JPM
  2. [Image]: http://investorplace.com/wp-content/uploads/2013/12/chart-key.gif

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