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| Trader Wizard Perspective Daily global capital markets advice "Blog" posted before the NYSE morning bell and throughout the trading day. | ||
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| Who is Trader Wizard? | ||
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| Trader Wizard's Mission
My goal with this Ezine, other than enjoying the challenge of a weekly ‘buy or sell’ recommendation, is to continue the independent investor information, education and facilitation process started with Trader Wizard. | ||
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| Articles by Trader Wizard | ||
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The Good Apple VXN Says ‘Sell’ Trading Systems An Oil Stock to Buy About VIX and VXN Trouble for GOOG Buyers Rally or Window Dressing? Investor Strategy for Brazil Is Boeing Order A Big Deal? A Technical Look At The Dow Portfolio Management Tactics | ||
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| Security Traders - Writers Guild Seeking Financial Writers | ||
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Security Traders - Financial Writers Guild recommended reading:The Stock Market Jungle
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| BUY or SELL Recommendation on JP Morgan Chase | |
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JP Morgan (NYSE: JPM) Sept 10 close: $39.80 RECOMMENDATION: SELL Strategy: Buy JPM=MH January 2005 Puts Strike@40 Price to be calculated at the market open September 13 (JPM=MH Sep-10 close @ $2.15) OneChicago Single Stock Futures (JPM1C): JPM1C Z4 (Dec 04) $39.74 Among general reading, here is the material I used to make this decision: EasyStock Interactive charts: Monthly, Weekly, Daily, Hourly, 30-Minute plus Reuters data at Yahoo Finance and the ValueLine study. |
| The case for selling: | |
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1. Earnings collapsed in 2001 following the Dec 31/2000 merger between JP Morgan and Chase; now there is a merger to complete with Bank One. Same deal on earnings. 2. Declining MACD and topping RSI and STO technical indicators in short-term data series will likely carry over to Weekly data charts, particularly if VIX and VXN volatility indicators bottom out here. VXN is now below 20, a major technical signal. 3. Guru analysis by Lynch is at 0%, Benjamin Graham Value methodology is just 14% and Motley Fool is at 32%. These are very low numbers caused by high debt, low earnings growth plus a 17.2 PE that ought to be several points lower. 4. Trading volumes are thin (BrownCo sub must be quiet place), mortgage applications have peaked, credit costs are to rise, and the stock is priced to perfection re assumed reduction in operating costs post-BankOne merger (versus my expectation for post-merger woes). That’s on top of a terrible June quarter (with no end in sight). 5. Negative earnings over past five years plus negative earnings comparisons until June 2005 (probably Sept). This company has operational issues to work out. |
| The case against selling: | |
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1. Strategic value of BankOne merger is tied to future cost reductions and earnings growth. Ultimately, this company is likely to get its act together in a big way. |
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