The Banking sector is experiencing positive fundamentals that have been driving the spike of their stocks in recent months:
1. USA Interest rate hikes: according to Bloomberg research, for each 1% that USA increases the interest rate level Banks like Bank of America will be benefited with extra revenue of USD 5,6 Bn .
2. Corporate tax cuts: Donald Trumps´s December 2017 corporate tax cut approval down to 21% is boosting USA Banks tax savings, according to Associated press those savings are reaching USD 3,6 Bn .
3. Deregulation: Donald Trump is willing to continue softening USA Banks regulation, such as the Volcker rule. USA Regulators already started rewriting one of the most debated Dodd Frank´s rule.
• JP Morgan is expected to release USD 2,24 EPS (Nasdaq.com), +23,07% compared to the previous results of USD 1,82 EPS .
• On the April´s 2018 quarterly result the increased up to 603 pips.
Now as shown in the chart, JP Morgan is facing a great technical momentum trading above the USD 102-104 range support as well as above two FIBO 0,382 & 0,236.
If the market mover is not able to drive JPM stock clearly below the USD 102-104, I see JP Morgan with a technical momentum above USD 102.
Adrian Lopez de Armentia - EFA
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