JPM – The weaker link

In the chart below you can see the correlation between JPM and the XLF.

We can clearly see that despite Friday’s rally in JPM, it is still weaker then the XLF. The technical analysis suggests that if the XLF will reverse its direction, JPM could be the best stock to short.

In JPM’s weekly chart (below) we also notice a possible Flag continuation pattern. If the stock price will rally into the resistance zone marked in the chart with red box, this could be a good setup for short entry.

Weekly resistance with the Flag’s upper border will be a though area to cross.

The only question is, will the XLF reverse its direction?