JPMorgan Chase & Co. (JPM)

davenerven (27.64) Submitted: 6/27/2008 3:43:38 AM : Start Price: $36.04 JPM Score: +11.51

JPM is USA's largest bank, with diversified and profitable operations worldwide. It has a history of competence and savvy, and compared to foreign banks, it is undervalued. So either we are questioning the competence of JPM, or we are panicking. Do we think JPM is inferior to, say, Barclays or Fortis or Credit Agricole, etc, at doing deals and managing risk? Why did the Fed choose JPM for the Bear Stearns deal? Why not choose Goldmans or Merrill or someone else? There is therefore an implicit understanding at the Fed that JPM has more fortitude than other banks to survive and prosper in this current difficult climate. Besides, if JPM is to fail, then the whole USA financial system is finished anyway so why worry?On a technical level, it looks either like a double bottom or a reverse head and shoulders forming now (26/6/08). Either way, it is primed for a technical bounce within the next few days.