Stocks are set for a mixed day as technology and the NASDAQ Composite are weak, while the S&P 500 is pushing out a small gain. Earnings continue to be the main driver for stocks, though in some cases, it’s the movement a week or two after the report that is starting to catch the chart-watchers’ eyes.
Today’s three big stock charts review the technicals of JPMorgan Chase & Co. (NYSE:JPM), General Electric Company (NYSE:GE) and Chipotle Mexican Grill, Inc. (NYSE:CMG). The first two have set courses that reversed their initial earnings move, while Chipotle shares are simply falling out of bed. Should you buy CMG on the pullback? Let’s see.
JPMorgan Chase & Co. (JPM)
Shares of JPMorgan are crossing above the $100-mark this morning as the company rebounded from its initial dip after the last earnings report.
The financials appear to be gaining steam again. Is it time to get on board JPM stock?
- Like many of the other financials, JPMorgan saw traders sell the news immediately out of the gate after the company’s earnings. The short-term pullback led to a great buying opportunity as the stock has rallied 5% over the last two weeks.
- JPM shares are crossing through the psychologically significant round-numbered level of $100. Historically, a move above levels like this will increase the buying pressure on a stock like JPMorgan.
- One warning, however, JPM shares are now trading firmly in overbought territory. Now, overbought can always become more overbought, but patient traders will likely get a chance to buy these shares on a pullback according to our testing of this indicator.
General Electric Company (GE)
Following up on last Friday’s comments on General Electric, the stock is following the pattern that we were afraid would grab the well-known industrial. The question now appears to be “how low can it go?”
Let’s see what the technicals say.
- GE shares broke through the $22-price-level yesterday. We identified this as long-term chart support that, if broken, would cause increased selling pressure. This is exactly what we are seeing after the breach.
- The break below $22 takes out multiple bottoms from 2014 and 2015 and targets a move in General Electric to $20, (another 10% decline) over the short-term as Wall Street analysts will begin to lower estimates and outlooks.
- Trading volume on GE shares continues to flow heavily into the market. This tells us that the larger holders of the stock, such as mutual funds and institutions, are lightening up on positions, not defending the shares.
Chipotle Mexican Grill, Inc. (CMG)
Apparently, the new queso didn’t give the lift needed to Chipotle’s results as the stock is trading 13% lower after their earnings report last night.
After trying to spend time building a bottom at $300, the stock has now cracked lower and it looks to be ready to fall further into a bear market.
- CMG shares slammed through $300, a round-numbered chart level that has been acting as support for the stock since August. The break of this level is increasing selling pressure on the stock immediately.
- Today’s price move has Chipotle shares slicing through their bottom Bollinger Band. One more day below this band will bring out a whole new round of technical sellers that will push the stock even lower.
- From a long-term perspective, CMG stock has been in a bear market since June 2017, when the stock moved below its 20-month moving average. Those looking for possible long-term support can put an alert in at $250, as the chart says this is likely the next stopping point on this bumpy road.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.
