Futures are down about one percent to kick off premarket trading, although volatility may increase intraday as traders may be bracing for a record surge in jobless claims, a number which spiked the millions according to financial analyst Patti Domm of Market Insider.
That said, new active trading opportunities continue to present themselves daily as financial professionals may be more involved in the stock market and economy now more than ever given the impacts of COVID-19, such as a $2 trillion stimulus package passed by the senate which is now being sent to the house of representatives.
Through my routine morning read of financial data sourced by TrackStar, big banks on Wall Street caught my attention as banks have been beneficiaries of financial stimulus relief in the past, as in the case of the financial crisis of 2008.
Applying my paid market research platform to perform some personal analysis, I discovered that veteran financial analyst Richard Bove of Odeon Capital stated “banks could become great trading opportunities as the Fed gives unprecedented support” in a recent press release to Marketwatch.
Having financial analysis experience through the dot-com bubble and financial crisis as well, Bove is a financial professional extraordinaire in the eyes of many, and has earned a trusted reputation on Wall Street as a result. Bove mentioned two universal banks by name which may create for the best trading opportunities in the days and weeks to come.
At the top of Bove’s list is JP Morgan Chase (NYSE: $JPM), a highly liquid stock to trade and the largest bank by market cap on Wall Street led by CEO Jamie Dimon, who you may have heard of in the past…
Shown in green in the chart above is JP Morgan Chase’s 20-day simple moving average line. Considering Bove stated JP Morgan Chase could be primed for a great trading opportunity (not an investing opportunity), I’ll look to place a bullish trade on JP Morgan Chase above its 20-day simple moving average line.
Should markets turn down and take JP Morgan Chase to the downside as a result, I’ll look to place a bearish trade on JP Morgan Chase to make the most of the momentum which today’s stock market continues to offer on a daily basis.
Second on Bove’s list of universal banks which could create great trading opportunities is Bank of America (NYSE: $BAC). Having traded Bank of America multiple times in the past, I’ve discovered it’s Wall Street’s fastest moving bank to trade. Bank of America is actively traded because it offers the most momentum of all the big banks on Wall Street.
One may be able to imagine that Bove included Bank of America in the two best universal bank stocks to trade due to its reputation of trading on high volume and at fast paces. For example, when other financial stocks may move 1% in a day, Bank of America can make a 2% move… It’s simply a more volatile trade than others are.
You may notice Bank of America’s daily chart looks fairly similar to JP Morgan Chase’s daily chart. That’s because banks have been moving with each other through the COVID-19 pullback. Indicated in green on the chart above is Bank of America’s 20-day simple moving average, a key resistance level headed into Thursday’s session.
Should Bank of America trade above its 20-day simple moving average line, I’ll look to make a bullish trade. Inversely, should Bank of America reject its 20-day simple moving average line, I’ll look to make a short biased trade.
Considering Richard Bove is a financial analyst who has gained both trust and respect through the dot-com bubble, financial crisis, and now into COVID-19, if Bove is optimistic that great trading opportunities are ahead for JP Morgan Chase and Bank of America, my guess is Wall Street institutions are as well.
As a retail trader, if I’m interested in a trade, you bet I want Wall Street’s sentiment invested in it as well. Afterall, Wall Street has deeper pockets than retail traders do, and Wall Street’s daily financial data is sourced by your #1 daily financial read, TrackStar.
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Disclaimer: This is not investment advice. This article is for information purposes only and opinion-based on financial advisor data across a selection of websites. Investors should be cautious about any and all investments and are advised to conduct their own due diligence prior to making any investment decisions.