FX.co ★ Megaphone pattern in JP Morgan stock

The stock price of JP Morgan not only has erased all the 2020 losses from the pandemic outbreak, it has managed to climb to new highs. Price is trading around $150 and although technically trend remains bullish, there are some warning signs that should not be ignored by traders.

Red line- expected price path

JP Morgan stock price has been trading in a bullish trend since the low around $77 back in March of 2020. Price continues making higher highs and higher lows. However the megaphone pattern we see in the weekly chart above provides a warning for bulls, as there are high chances of a major reversal. Noticing also the weekly RSI pattern, we observe that despite the new highs in price the RSI is making lower high. This is a weekly bearish divergence. This is another warning. So far price seems to have made at least a short-term top around $161. Price is now pulling back. A move towards $130-$120 is highly likely. However we should not forget the megaphone pattern and the possibility of a bigger move lower.