JPM ascending triangle could provide some fireworks

An ascending triangle in a bear market presents problems for swing  traders. It is a bullish pattern, but in the context of a larger bear market it can be thought of also as a bear flag. In either case the ascending trendline as well as the horizontal resistance line that make up the triangle, can be used as trading pivots for an extension in the same direction.

This brings us to the daily chart below of JPM. The horizontal resistance line near $36.90 which is just above the 200day moving average as well as where the stock opened after gapping down in May, was tested today, and for now failed. Todays high was $36.80...todays 200day moving average $36.82.

Overall, IF this horizontal resistance line is taken out on above average volume look for a strong extension towards the gap down area from May near $41. Aggressive traders may look to short here (using a tight stop) with the view that the stock will return back to its bullish trendline currently near  $35.50. But given the resilience of a broad market retreat, the risk reward appears to be to the upside. Traders playing the swing up would (depending on their risk profile) look to buy between here and the bullish trendline near $35.50 or buy on a high volume move over $36.90 with the expectation of an extension towards the  $40-$41 area...approximately 8-10% higher.