JP Morgan Is A Buy For Today

Financial related shares did relatively well yesterday, as stocks held on to modest gains. Part of the reason for the gains, was rumors that the government is looking at setting up a “bad bank,” that would assume all the mortgage-backed toxic assets that are currently sitting on the balance sheets of the country’s banks.

This morning, the futures are indicating a very strong open for stocks. Should that hold through to 9:30 AM, we do get earnings from Dow components AT&T (T) and Boeing (BA) before the bell that could possibly change things, we will see a rally in financials and on that, we are recommending JP Morgan (JPM) as a buy today.

JP Morgan closed at $25.06 yesterday, if we do get a rally at the open and the stock opens to the upside, enter up to $25.75, we would suggest putting in a good for the day limit order at this price even before the stock opens. Depending on how strong the market and financials are, if we do get a rally, you can adjust that upward.

Once in, look to take an eight to ten percent profit and exit this week. We will supposedly get firm news from the government next week, with regards to the bad bank idea. While getting the bad assets off the books of banks could send related stocks soaring, we don’t know how this will be done and with the devil being in the details, there is a possibility that financials could actually fall on the news, so again, take early profits.

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