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UPDATE: JPMorgan Results To Shape Bank Trade

Tuesday, 13 Apr 2010 | 5:30 PM ET

What JPMorgan says Wednesday will likely shape the bank trade for some time to come.

That's not only because JPMorgan is the first big bank to report -- but also because it's doubtful the rally can continue without the banks.

In other words, when JPMorgan speaks, investors will listen. What should you expect to hear? Following is a preview from 3 critical angles, fundamentals, technicals and options action.

Fast Money 360
A view of the fundamentals, technicals and options market view ahead of JPMorgan earnings.

FUNDAMENTALS

For the fundamental analysis we turned to Moshe Orenbuch of Credit Suisse and we can tell you his analysis is squarely bullish.

He called JPMorgan, “my favorite stock heading into earnings. ”We're looking for 59 cents a share for the quarter,” he said.

Orenback has a $54 price target on the stock.

“Trading profits improved significantly from Q4, (and as) credit quality improves as the year goes on -- the stock (should) hit our $54 price target during 2010,” he said.

CHARTS

For technical analysis we went to Carter Worth of Oppenheimer and he too is solidly bullish.

Patterns in “JPMorgan (show) well defined tops over the period of a year, year and a half (and) a well defined cup and handle formation,” he explained.

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What’s that mean?

”The presumption is a big move to the upside, get long,” counseled Worth.

OPTIONS

However, options investors are just slightly more cautious, according to the Pit Boss, Pete Najarian

He said, "options markets are not expecting a very big move out of JPMorgan. We’ve had big moves in the past, (but I’m) not expecting it this time. I tend to be bullish right here, but I don’t expect a very large move from JPMorgan."

Behind the Numbers
A look ahead of JPMorgan earnings and Citi raising American Express, with Donald Fandetti, Citi analyst.

What’s the trade?

I think JPMorgan earnings will be fine, says Guy Adami. But the question is whether shares can push through reistance and break higher.

The biggest driver will likely be what happens with their consumer credit business, adds Karen Finerman. That should drive earnings more than anything else. Personally, I love this story long-term and I’m a buyer after earnings, says Karen Finerman.

I think JPMorgan sets up nicely, says Joe Terranova on Monday's Fast Money. I expect the stock to go north of $50.

If you’re looking for a bank trade I prefer long BofA, says Pete Najarian.




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Trader disclosure: On April 13, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Najarian Owns (CSX) call spread; Najarian Owns (LVS) call spread; Najarian Owns (JPM) call spread; Najarian Owns (BAC) Calls; Najarian Owns (C) Calls; Najarian Owns (CSX) Call spread; Najarian Owns (LVS) Call spread; Najarian Owns (JPM) Calls; Najarian Owns (PCX); Najarian Owns (TXN) Calls; Najarian Owns (VLO) Calls; Najarian Owns (YUM) Call Spread; Adami Owns (INTC), (GS), (AGU), (MSFT), (NUE), (BTU), (C) ; Finerman's Firm Is Short (IJR), (MDY), (IWM), (IYR); Finerman's Firm Owns S&P Puts; Finerman's Firm Owns (JPM); Finerman Own (JPM) ; Finerman Owns (BAC); Finerman's Firm Owns (BAC); Finerman's Firm Owns (BAC) Preferred; Finerman's Firm Owns (TGT); Finerman's Firm Owns (WFC) Preferred; Finerman Owns (WFC) Preferred; Finerman Owns (YUM); Seymour Owns (CHL), (DRYS), (GE), (BAC), (EEM), (F), (INTC), (LVS), (SBUX); Seymour's Firm Owns (POT)

For Patty Edwards
Edwards Owns (JPM) for Clients
Edwards Owns (INTC) for Clients|
Edwards Owns (GS) for Clients

For Citi analyst Donald Fandetti
Citi Owns (AXP)
Citi Owns (COF)
Citi Has Provided Baking Services To (AXP)
Citi Has Provided Baking Services To (MA)
Citi Has Provided Baking Services To (COF)
Citi Expects To Receive Compensation from (AXP), (V), (MA)
Citi Has Acted As Manager or Co-Manager Of Offering of (AXP), (COF)
Citi has Managed a Securities Offering of (YUM)
Citi Has Received Compensation from (YUM)
(YUM) is an investment banking client of Citi



Trader disclosure: On Apr 12, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Grasso Owns (AAPL), (C), (BAC), (WMT), (T), (LPX); Karabell Owns (FCX); Karabell Owns (AAPL) ; Jon Najarian Owns (PALM) options; Jon Najarian Owns (CAR) options; Adami Owns (INTC), (GS), (AGU), (MSFT), (NUE), (BTU), (C); Terranova Owns (HES), (TER), (AXP), (MOS), (APA), (YHOO); Terranova Is Short (LCC); Pete Najarian Owns (AA) Call Spread ; Pete Najarian Owns (BAC) Calls; Pete Najarian Owns (C) Calls; Najarian Owns (DD) Call Spread ; Najarian Owns (DOW) Call Spread; Najarian Owns (LVS) Call Spread; Najarian Owns (MRVL); Najarian Owns (PCX) & Short (PCX) Calls; Najarian Owns (STX) Call Spread; Najarian Owns (TSO) Calls; Najarian Owns (YUM) Call Spread; Najarian Owns (YHOO) Call Spread; Finerman's Firm Is Short (IJR), (MDY), (SPY), (IWM); Finerman's Firm Is Long S&P Puts; Finerman Owns (AAPL); Finerman's Firm Owns (BAC), (BAC) Leap; Finerman Owns (BAC), (JPM); Finerman's Firm Owns (TJX), (BBY), (JPM), (AEO), (IBB)

Other Relevant Disclosures:
Credit Suisse Does and seek to do business with companies covered in its research reports (JPM)
Stuart Frankel & It's Partners Own (LPX)
Stuart Frankel & It's Partners Own (SDS)


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