3 Big Stock Charts for Wednesday: Chesapeake Energy Corporation (CHK), General Electric Company (GE) and JPMorgan Chase & Co. (JPM)

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Despite some shaky activity overnight, the market is finding its way to melt higher again today. Despite the strength that we’ve see in the broader indices, there are some very large names that are not only being left behind, but are also at risk of some serious declines.

Today’s three big stock charts take a look at the bullish case for Chesapeake Energy Corporation (NYSE:CHK) as well as the warning signs in the charts of General Electric Company (NYSE:GE) and JPMorgan Chase & Co. (NYSE:JPM).

Chesapeake Energy Corporation (CHK)

Chesapeake Energy Corporation (CHK)
Source: Chart courtesy of StockCharts.com

We’ve said it before and it apples now: Chesapeake is one of the more technically sensitive stocks in the energy sector, making it prime for chart trading.

CHK shares have spent the last week consolidating at $5.75 and appear ready to make a move. As recently as two weeks ago, the technical picture for the stock looked grim, but things change.

This week, the 50-day moving average for Chesapeake transitioned into an intermediate-term bullish outlook. This happened when the trendline shifted into an ascending pattern. For those unfamiliar, our back testing of this with CHK and other stocks indicates that there is a 2:1 probability that each trading day is going to see the stock move higher.

Volume on Chesapeake has been driving a little lower as the technicians appear to be waiting for a trigger, which from our perspective is going to be a couple more closes above $5.75.

Short sellers just increased their positions by 4% in the last report. More importantly, the short interest position is 14% of the stock’s float.

The chart is suggesting that the move above $5.75 is likely to trigger a volatility move higher with a break of the top Bollinger Band, which will accelerate. Short-term target from the chart is $6.25.

General Electric Company (GE)

General Electric Company (GE)
Source: Chart courtesy of StockCharts.com

“The General” is struggling and the charts don’t look to change.

We’ve watched this industrial lag the market for a while. Year-to-date, GE shares are down 11% against the S&P 500’s 7% gain.

General Electric’s post-earnings sell-off took the stock to an extremely oversold reading of its RSI, indicating that a bounce of some sort was on the way. Call it market physics. Unfortunately, the bounce looks to be of the “dead cat” variety as shares look ready to roll back over.

Looking at the chart, $28 served as the bottom for GE stock in November 2016 after a tepid earnings report and also as chart support in February 2016. Chart watchers know that previous support levels often turn into resistance and that’s the case here.

The 20-day moving average for General Electric is also getting ready to apply some pressure to the stock, which is likely to serve as the trigger for another move lower on increased volume. The intermediate-term target for GE stands at $25.

JPMorgan Chase & Co. (JPM)

JPMorgan Chase & Co. (JPM)
Source: Chart courtesy of StockCharts.com

Financials are starting to give up some of their strength as a result of a number of fundamental developments. Shares of JPMorgan are showing a shift in the chart that intermediate- and long-term investors should be noting.

The development is the recent activity in the 50- and 100-day moving averages. Last week, these trendlines converged as the 50-day was crossing under the longer, slower moving 100-day. This is an indication that JPM stock is crossing into a deeper bearish trend.

The recent rally in JPMorgan shares was the result of an oversold reading of the RSI after two days of heavy volume selling. The volume dropped and allowed JPM shares to rally on lighter action, indicating that the move is likely to be temporary.

Watch for JPMorgan stock to accelerate its move lower on a break back below $85. From there, the target turns to $80, the site of the stock’s 200-day moving average.

As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2017/05/3-big-stock-charts-for-wednesday-chesapeake-energy-corporation-chk-general-electric-company-ge-and-jpmorgan-chase-co-jpm/.

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