Trade Of The Week: JPMorgan Chase Short Setup

JPMorgan Chase (JPM) rallied sharply in the last week on a solid earnings report and bullish action in the sector. However, the stock is extended on the daily chart and into major resistance.

JPMorgan Chase is hitting the upper trend line of a parallel channel. Every time JPMorgan tags this trend line, it has pulled back. When it tags the $261-$262 level, it will be even more pricey on a valuation basis. This raises the probability of a pull back.

This week, probability signals a likely pull back in JPMorgan Chase stock.