JPMorgan, Citigroup rally after Q3 earnings beat estimates

Shares in JPMorgan Chase & Co are trading higher on the IG platform ahead of the US cash open after third quarter profit beat expectations. Trading revenue jumped 30% to $6.6 billion and earnings per share came in at $2.92, surpassing analysts’ forecasts for $2.23, according to Refinitiv. Net interest income fell by 9% to $13.1 billion with the Federal Reserve having slashed interest rates to almost zero in the fallout from the global pandemic.

CCitigroup shares are also rallying in Tuesday’s pre-market session after third quarter FICC sales and trading revenue hit $3.79 billion, beating the street’s expectations for $3.66 billion. GAAP EPS hit $1.40 beating by $0.49 and revenue reached $17.3 billion, falling 6.8% year-on-year but in line with expectations. Net income came in at $3.2 billion, more than double the second quarter result but down 34% year-on-year. Also, Citigroup’s credit costs fell sharply, in a positive indication for the US banking sector.

JPMorgan: technical analysis

Taking a look at the chart of JPMorgan, the stock is down by just over 25% year-to-date. However since the March lows, the stock has been in recovery mode, trading in an ascending trendline with higher lows. In September it came close to breaking trendline support but instead bounced off it to push back above the 38.2% Fibonacci retracement level, which puts it on track to potentially test the 50% fib line and subsequently the June peak, which is just under the 61.8% fib line. As the RSI points higher, look for the indicator to make a higher high about 65, which would break the divergent pattern of lower highs since June. This would suggest there is momentum behind the recent move higher for the stock, with the support potentially indicate there is more room to run on the upside.