JPMorgan Chase & Co. (JPM) shares rose nearly 3% on Wednesday after 10-year Treasury yields breached the 3% mark for the first time since late May. With two-year Treasury bonds trading roughly flat, the steepening yield curve is a positive for bank net interest margin and helped the entire sector move higher mid-week.
In addition to the rising yields, President Trump's decision to impose 10% tariffs on $200 billion worth of Chinese imports was less than the potential 25% tariffs. The trade war remains a key issue, but stocks brushed off the concerns this week and moved sharply higher. Citigroup, Inc. (C), The Goldman Sachs Group, Inc. (GS) and Deutsche Bank AG (DB) were other top-performing financial stocks during Wednesday's session. (See also: JPMorgan Chase & Co.: The Big Bank.)
From a technical standpoint, JPMorgan stock broke out from pivot point and upper trendline resistance at around $115.50 to R1 resistance at $117.59 by mid-session. The relative strength index (RSI) moved closer to overbought territory with a reading of 64.65, but the moving average convergence divergence (MACD) experienced a bullish crossover that could signal a longer-term change in the prevailing trend.
Traders should watch for a breakout from R1 resistance to retest prior highs or R2 resistance at $120.60 over the coming sessions. With the lofty RSI reading, there could be some consolidation before a move higher, but the medium-term trend could see a reversal if support levels near R1 resistance hold over the coming sessions. (For more, see: JPMorgan Is Launching New Brokerage App With Free Trades.)
Chart courtesy of StockCharts.com. The author holds no position in the stock(s) mentioned except through passively managed index funds.