A bank stock is poised for a breakout. Not because of earnings. Not because of loan growth. Not because of net interest margin expansion. Because a line on a chart is near another line on a chart.
JPMorgan Chase, the largest bank in America, needs technical analysts to tell everyone it might go up. The company has $3.9 trillion in assets. It prints money in seventeen different ways. But sure, what really matters is whether the stock closes above resistance.
The upside potential appears greater than the downside risk. This is what passes for analysis now. The stock might go up more than it goes down. Groundbreaking stuff. Someone spent four years at Wharton to write that sentence.
Retail traders are currently Googling "non-AI trade" because their Nvidia calls expired worthless and now they need a new way to lose money. They have decided banking is the safe play. The same people who thought JPMorgan was part of a global conspiracy last year now want in because a triangle pattern told them to.
The breakout is scheduled for next week. The chart has an appointment. Tuesday at 2 PM the stock will break resistance, file the proper paperwork, and notify all shareholders of its technical pattern completion.
Here is what actually happens next week: JPMorgan stock will move in one of three directions. Up, down, or sideways. The technical analysts will claim they called it. The headline will age like milk. And some guy named Derek will buy calls at the top because he saw a YouTube video about cup and handle patterns.
JPMorgan does not care about your trendlines. JPMorgan cares about lending money at higher rates than it borrows money. That business model has worked since the Medicis figured it out. But go ahead, buy the breakout. The chart says you should.
Photo by Oren Elbaz on Unsplash
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