JPMorgan (JPM, $95.36) to pay $920 million in fine on spoofing charges

JPMorgan Chase   has admitted wrongdoing and agreed to pay more than $920 million to settle market-manipulation investigations.

The Commodity Futures Trading Commission said in a statement that this was the biggest monetary penalty it has ever imposed. Charges include a $436.4 million fine, $311.7 million in restitution and more than $172 million in disgorgement.

The malpractice under investigation, known as spoofing, typically involves flooding derivatives markets with orders that traders don’t intend to execute. The intention is to wrongfully influence others into moving prices in a desired direction.

Tickeron's analysis shows: 

JPM's RSI Indicator ascending out of oversold territory

The RSI Indicator for JPM moved out of oversold territory on September 25, 2020. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 23 similar instances when the indicator left oversold territory. In 17 of the 23 cases the stock moved higher. This puts the odds of a move higher at 74%.

Current price $95.36 crossed the resistance line at $96.28 and is trading between $96.28 resistance and $91.65 support lines. Throughout the month of 08/26/20 - 09/28/20, the price experienced a -3% Downtrend, while the week of 09/21/20 - 09/28/20 shows a +0.89% Uptrend.

Technical Analysis (Indicators)

Bullish Trend Analysis

The Stochastic Indicator shows that the ticker has stayed in the oversold zone for 8 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.

Following a +3.78% 3-day Advance, the price is estimated to grow further. Considering data from situations where JPM advanced for three days, in 167 of 320 cases, the price rose further within the following month. The odds of a continued upward trend are 52%.

JPM may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.

The Aroon Indicator entered an Uptrend today. In 149 of 266 cases where JPM Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 56%.

Bearish Trend Analysis

The Momentum Indicator moved below the 0 level on September 11, 2020. You may want to consider selling the stock, shorting the stock, or exploring put options on JPM as a result. In 42 of 83 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 51%.

The Moving Average Convergence Divergence Histogram (MACD) for JPM turned negative on September 09, 2020. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 46 similar instances when the indicator turned negative. In 23 of the 46 cases the stock turned lower in the days that followed. This puts the odds of success at 50%.

JPM moved below its 50-day Moving Average on September 17, 2020 date and that indicates a change from an upward trend to a downward trend.

The 10-day Moving Average for JPM crossed bearishly below the 50-day moving average on September 22, 2020. This indicates that the trend has shifted lower and could be considered a sell signal. In 6 of 15 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 40%.

Following a 3-day decline, the stock is projected to fall further. Considering past instances where Apple declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 46%.

Fundamental Analysis (Ratings)

Tickeron has a negative outlook on this ticker and predicts a further decline by more than 4.00% within the next month with a likelihood of 57%. During the last month, the daily ratio of advancing to declining volumes was 1 to 1.51.

The Tickeron Profit vs. Risk Rating rating for this company is 43 (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 88, placing this stock slightly better than average.

The Tickeron Seasonality Score of 47 (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.

The Tickeron PE Growth Rating for this company is 49 (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron Price Growth Rating for this company is 56 (best 1 - 100 worst), indicating steady price growth. JPM’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron Valuation Rating of 69 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: JPM's P/B Ratio (1.25) is slightly higher than the industry average of (0.77). P/E Ratio (12.96) is within average values for comparable stocks, (10.37). Projected Growth (PEG Ratio) (0.68) is also within normal values, averaging (4.45). Dividend Yield (2.44) settles around the average of (2.75) among similar stocks. P/S Ratio (2.08) is also within normal values, averaging (1.59).

The Tickeron SMR rating for this company is 90 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

Contributor

Sergey Savastiouk|Expert

Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.

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