2022-12-20 • Updated
The total US stock market capitalization surpassed $30 trillion in 2018. Out of these, $2 trillion was the share of the publicly traded banks and financial organizations. Not so impressive, one may say. But don’t be too quick to go for the giants. The technologies and customer preferences change, the energy use and industries also change, but the money is always needed – at all times. That’s why the financial sector, although weighing just as much as Apple and Amazon do together, is one of the most resilient and reliable parts of the market. Therefore, for strategic investment, that will always be an interesting option.
The first look at JP Morgan stock (JPM) performance shows a pretty optimistic picture. The entire decade since 2010 shows an unstoppable rising trajectory. Taking into account promising projections made by observers for the banking industry, nothing particular seems to be a possible obstacle in the way of further growth for this stock.
The recent performance of this stock gives a similarly positive picture, although not a very smooth one. In 2018, it dropped from $120 to $92 per share, being in the sideways movement in most of the year. But in 2019, it recovered all the losses and now trades in the area of $140 per share. Although the Awesome Oscillator hints that there should be a correction downwards after such a leap up, the long-term perspective for this equity is “buy”.
However, analysts do not expect the price to advance in 2020 as aggressively as it has been recently. For this reason, modest steady growth will be a well-balanced expectation.
The monthly chart for Citigroup below shows a much more dramatic picture.
Seeing this destruction, one may say: “the stock was worth $570 in 2007; since then, it hardly got to challenge $80 – what is there to discuss?”. Hold on a minute. Yes, the bank suffered immense losses, so much that the US government came to its aid. But after the collapse in 2008, what do we see? That is, what are the stock price dynamics in the last decade? Steady growth. It may be not as skyrocketing as we saw with JP Morgan, but still, it is a consistent upward trajectory. According to analysts, the bank’s management is holding a good direction which may double this stock’s value in several years. If that happens, $160 per share at the end of this chart may be a start for Citigroup’s re-conquest of the lost splendor.
We are familiar with S&P 500 – it is a collective US stock market index. It reflects the performance of the entire market and includes public companies from all spheres of economic activity. However, the investors like to compare individual companies not only to the entirety of the country market but to the industry they belong to. That’s why we have specific subgroups of the main index, such as the S&P 500 Finance.
The performance of this index in the last decade is 150% growth as it went from 200 points in 2010 to roughly 500 in January 2020.
Source: www.us.spindices.com
Now, we have seen JP Morgan showing tremendous gains. What is its corresponding performance for the decade? It went from roughly $40 in 2010 to almost $140 now, giving 250% growth. That is considerably higher than the industry average mentioned before.
And Citigroup? From $40 in 2010 to $80 in 2020, it provided a 100% gain. Being below 150% of the industry is a reason it is considered one of the worst performers. And for the same reason – one of those with most potential.
Both JP Morgan and Citigroup are available to trade in MT5. To do that, you need to:
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Bearish scenario: Sales below 80.00 with TP1: 79.60... Anticipated bullish scenario: Intraday purchases above 80.70 with TP: 81.50...
Brent oil is currently on a bullish trend, facing resistance near $84 and supported by the 200-day EMA. Breaking above this level could lead to a climb towards $90. Short-term support is observed around $80, backed by the 50-day EMA. As summer approaches and travel increases, crude oil tends to benefit from seasonal patterns. Despite temporary setbacks, buying...
Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...
Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.
Bearish scenario: Sell below 1.0820 / 1.0841... Bullish scenario: Buy above 1.0827...
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