JPMorgan Chase (NYSE: JPM) is set to release its fiscal third-quarter earnings on October 13 before the market opens. The stock has been under bearish pressure recently, but derivatives market activity suggests a potential shift in sentiment following the report.
Consensus estimates call for earnings per share of $5.94 on revenue of $51.2 billion, representing year-over-year increases of 17% and 8.7%, respectively. Despite these expectations, JPM shares are only up about 2% since the start of the year.
Technical indicators point to bearish control
From a technical standpoint, bears appear to have the upper hand. The stock has recently slipped below its 20-, 50-, and 100-day moving averages. The relative strength index (RSI) sits in the early 40s, indicating a lack of significant buying pressure that could help reclaim those levels in the near term. Furthermore, the 200-day moving average is near $323, suggesting that a further decline of a few percentage points could break the longer-term uptrend.
Options market hints at a bullish reversal
Despite the bearish technicals, options traders are positioning for a rebound. According to Barchart, the put-to-call ratio for contracts expiring October 23 is 0.51, indicating a bullish skew (a reading below 1.00 typically favors buyers). The upper price on those contracts is just above $346, implying a potential rally of over 3.5% following the Q3 results.
Wall Street remains optimistic as well, with a “Moderate Buy” rating and a price target of $368, suggesting upside potential into late 2026.
Fundamental catalysts beyond the headline numbers
Beyond the immediate earnings catalyst, JPMorgan’s capital markets business offers additional reasons for optimism. Co-President Doug Petno indicated last month that investment banking fees and trading revenue are expected to grow by “mid-to-high teens” percentage, suggesting both businesses could contribute meaningfully to quarterly performance.
Delivering on those expectations, coupled with an encouraging outlook for client activity, could strengthen the case for a recovery in JPMorgan. However, credit quality and funding costs deserve close attention. If higher loan-loss provisions or deposit expenses absorb the additional revenue, the bullish argument weakens.
A sustained rebound in JPM stock would be much more convincing if management demonstrates that business growth is translating into durable profitability.
This article is for informational purposes only and does not constitute financial advice.
