Chart of the Day: Bank of America Resets Its Price
After a steep drop, the mega bank is trying to build a solid base.
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It has been a rough autumn for Bank of America (BAC), shedding about 22% of its market cap since peaking in mid-August. One of the reasons is higher interest rates, but BAC also got caught with a big fine connected to wire transfers related to money laundering and crypto. The company took a big writedown for the charge. As for mortgages, a slumping market due to higher rates has knee-capped earnings a bit, but BAC has seen a bit of resurgence in trading and net margins.
The chart is weak but starting to improve.
No question the price action in BAC is bearish. Pink/purple in the top pane means bearish on the GoNoGo composite of indicators. MACD just turned up but that reflects a moderating move in the moving averages. Stochastics have turned up as well as money flow; there are some green shoots here.
The best case would be to continue the basing process started last month. Earnings could be a catalyst but that won’t be until January. Building a nice base between $48-54 would be ideal for the next several weeks, allowing the big money to add the stock at a low-risk entry level.
We like Bank of America in TheStreet Pro Portfolio and rate it a Two, or “stockpile on pullbacks.”
At the time of publication, TheStreet Pro Portfolio was long BAC.
