Week 41 Wall Street watchlist
By Antreas Themistokleous
12 October 2023
J P Morgan Chase & Co
J.P. Morgan Chase & Co (JPM) saw its share price remain stable in the third quarter of the year, with no significant fluctuations compared to the start of July. The company is set to release its earnings report for the fiscal quarter ending September 2023 on Friday, October 13th, before the market opens. The consensus EPS stands at $3.86 (USD), down from $3.12 in the same quarter of the previous year.
As of June 30, 2023, the company's financials are, to put it mildly, in poor shape. The debt level is the highest it's been since 2010, marking a 26.32% year-over-year increase. Moreover, the bank's current ratio is only 90%. This suggests that the company is heavily dependent on debt and lacks the means to cover its short-term liabilities with its current assets.
Technical analysis indicates that the price is responding to the 50% level of the weekly Fibonacci retracement and is adjusting upwards. At the moment, it's testing the 38.2% Fibonacci level alongside the 100-day moving average. If the price successfully breaches the $145 mark, the next substantial resistance might be near the $150 level. This is a key psychological threshold due to its round number, correlates with the 23.6% of the weekly Fibonacci retracement level, and matches a price response noted in mid-September.
UnitedHealth Group Incorporated
In the third quarter of the year, shares of UnitedHealth Group Incorporated (UNH) saw an approximate 10% increase, effectively offsetting the losses from the previous quarter. The company is slated to release its earnings report for the fiscal quarter concluding in September 2023 on Friday, October 13th, prior to market opening. The consensus EPS is $6.33, up from the $5.79 recorded in the same quarter last year.
While the recent uptrend in share price is encouraging, the company's financial health presents a varied outlook. On the positive side, there's been consistent growth in net income over the past two years. However, debt has surged by about 29.41% year-on-year, making up nearly a third of all liabilities as of June 30, 2023. The current ratio now stands at 80%, yet total assets surpass total liabilities with a ratio of 1.7:1.
From a technical analysis standpoint, the price has frequently probed the limits of the Bollinger bands. This suggests significant volatility in the market for the company's shares. For the past 14 consecutive sessions on the daily chart, the Stochastic oscillator has been in extreme overbought territory, hinting at a potential downward correction.
The price might attempt to retest the prior high of approximately $530. However, a downward correction could follow, especially since the 50-day moving average remains above the 100-day moving average. This indicates that, for now, the overall bullish momentum persists.
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This is not investment advice. Past performance is not an indication of future results. Your capital is at risk, please trade responsibly.
Antreas Themistokleous is a trading specialist in Exness. He is a Certified Financial Technician since 2018. As a member of the Society of Technical Analysts, Antreas is implementing advanced use of indicators and patterns to conclude in an action plan for different trading strategies.
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