JPMorgan is breaking out, rallying more than 6 percent in the past 30 days to a fresh 15-year high. And according to one technician, the chart is setting up for even more gains—which could mean big moves in the broader market.
"JPMorgan helped lead the market higher [earlier this week], I think [the stock] will continue to go higher and this holds bullish implications for the overall market," technical analyst Rich Ross said on Wednesday's "Trading Nation."
On a long-term chart of JPMorgan, Ross pointed to what he sees as a "cup and handle," a classic formation that technicians say often leads to more gains.
"This pattern is formed by a big base of support, the cup, and is followed by a smaller rounded base of support—that's our handle," said Ross, head of technical analysis at Evercore ISI. JPMorgan has recently broken above the neckline of the cup and handle pattern and that, he added, illustrates that the stock should go "meaningfully higher."
As Ross points out, JPMorgan's move higher represents more than just a sharp rise "on a daily basis"—but rather, a significant move above levels "not seen since 2000," he said. To Ross, the rally in JPMorgan is more than just a single stock story; it could portend gains for the broader market at well.
"Play for a breakout in JPMorgan and stay bullish on the market," said Ross.
The sector makes up 16 percent of the S&P 500, making it the second-largest category behind tech. But as a group, the financials have been underperforming the broader market over the past two years, and according to Ross, the "bullish breakout in JPMorgan should provide the catalyst for the next leg up in the S&P 500."
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