The financial sector has steadily firmed over recent months, as the Financial Select Sector SPDR Fund (NYSE: XLF) has climbed over 11% in three months after finding support near a critical level. In the dynamic world of financials, two stocks have caught the attention of investors: JPMorgan Chase & Co. (NYSE: JPM) and The Goldman Sachs Group, Inc. (NYSE: GS).
Offering impressive relative strength and attractive risk: reward technical setups, these industry giants offer enticing growth opportunities in the quickly-evolving financial sector.
JPMorgan Chase & Co. (NYSE: JPM)
JPMorgan Chase & Co. is the largest bank in the US and the 5th largest worldwide. It resulted from mergers, with its oldest predecessor, The Bank of The Manhattan Company, founded in 1799. Operating through four segments, it offers services across 48 US states and globally through branches, ATMs, online, mobile, and telephone.
The stock has a P/E of 10.06, firmly positioning itself as a potential value play and a dividend yield of 2.56%. Analysts see an upside in the stock, with a consensus rating of Moderate Buy and a price target of $164.39, predicting a 5.14% upside. Of the eighteen analysts, twelve have JPM as a Buy.
JPM has been one of the standout financial performers this year, up 16.59% year-to-date and close to 40% over a year.
After clearing a critical level of resistance in July, at $144, the stock has steadily climbed higher in an uptrend. Over the past two days, the stock pulled back and found support immediately, confirming a higher low within the uptrend, indicating buyers are stepping higher. Evidence right now suggests that pullbacks will continue to be bought in JPM, and momentum could continue to the upside.
The Goldman Sachs Group, Inc. (NYSE: GS)
The Goldman Sachs Group, Inc., founded in 1869, began as an investment bank for institutions and businesses. It now offers diverse financial services globally through four segments: Investment Banking, Global Markets, Asset Management, and Consumer & Wealth Management. It is designated as systemically important by US banking regulations.
GS has a dividend yield of 2.83% and a P/E ratio 15.06. Like JPM, analysts have a consensus rating of Moderate Buy for GS, with a price target of $396.93, predicting a 12.46% upside. Of the eighteen analyst ratings, eleven have GS as a Buy.
Year-to-date, GS has lagged behind the broader market and its competitor, JPM. However, it has recently experienced positive momentum, climbing almost 10% over the past three months and now up 2.79% year-to-date.
The stock is now at a vital inflection level, at $350. Previously, $350 has been a critical level of resistance, with the stock now trying to turn that level into newfound support. If the stock can successfully convert this area into support, a move toward $360 might be possible, with a breakout and second leg higher confirming above that level.