JPMorgan Chase & Co. (JPM) is the largest of the four "too big to fail" money center banks and is the only major bank in the Dow Jones Industrial Average. The banking giant ended the second quarter with total assets of $2.30 trillion, which represents 13.1% of the entire U.S. banking system. This figure is down from $2.33 trillion in the first quarter, which is a warning that the bank is reducing overall lending.

Shares of JPMorgan closed Monday, Oct. 8, at $115.32, up 7.8% year to date and up 12.8% from the 2018 low of $102.20 set on July 6. The stock is just 3.4% below its Feb. 27 high, which is also the all-time intraday high at $119.33. Meanwhile, the Dow 30 is up 7.2% year to date and is just 1.7% below its all-time intraday of 26,951.81 set on Oct. 3.

Analysts expect JPMorgan to post earnings per share between $2.25 and $2.33 when the company reports before the opening bell on Oct. 12. JPMorgan's status as the nation's biggest bank and its largest balance sheet gives it an opportunity to continue a string of 11 consecutive earnings-per-share beats. JPMorgan remains the most important stock given its global banking activities. The fact that the bank has announced plans to cut 400 jobs in its consumer home lending division is a red flag. (See also: Technical Headwinds Could Delay JPMorgan Chase Breakout.)

The daily chart for JPMorgan

Daily technical chart showing the performance of JPMorgan Chase & Co. (JPM) stockCourtesy of MetaStock Xenith

The daily chart for JPMorgan shows that the stock traded back and forth around its 200-day simple moving average between May 19 and July 16, with this moving average now at $112.05. The top horizontal line is my semiannual pivot of $109.39, which was penetrated and held on July 16 on a positive reaction to earnings reported on July 13. Beware that JPMorgan stock tried to set a new high on Sept. 20 but stayed just shy of the Feb. 27 high of $119.33.

The weekly chart for JPMorgan

Weekly technical chart showing the performance of JPMorgan Chase & Co. (JPM) stockCourtesy of MetaStock Xenith

The weekly chart for JPMorgan is neutral, with the stock above its five-week modified moving average of $114.41. The stock is well above its 200-week simple moving average at $81.55, which is the "reversion to the mean" last tested during the week of Feb. 12, 2016, when the average was $54.44. The 12 x 3 x 3 weekly slow stochastic reading is projected to fall to 68.15 this week, down from 73.71 on Oct. 5. A weekly close below $114.41 would result in a chart downgrade to negative.

Given these charts and analysis, traders should buy JPMorgan shares on weakness to my semiannual value level of $109.38 and reduce holdings on strength to my quarterly risky level of $133.15. (For more, see: Buy Bank Stocks and Profit on Market Dip: Bernstein.)

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