By Relmor Demitrius
There are certain times in a stocks trading cycle where you start thinking about buying on pullbacks, expecting a nice rally to come. As with shares of Bank of America (NYSE:BAC), this appears to be one of those times. The stock has recently pulled back from its near term high of $15.31 and indicators are once again turning neutral to bullish. Let us take a look at the chart posted below.
I have posted the MACD indicator. It is now going from down to neutral, a sign a stock is stabilizing. The weekly MACD has already been and still is bullish. Also, it has been 5 days now since on this current retrace the stock has received a new low. Flat price trading is indication of accumulation and a big move up or down would be expected.
Down? Not likely looking at the general trend medium term. Stock market is making new 52 week highs almost weekly now and certain fundamental aspects of the banking industry have already bottomed a long time ago now. Is the time ripe for a rally? Within the next 2 weeks, I would say, yes. Time to accumulate the stock now, in my opinion, and wait for a nice rally back over the $15 area. How high it can go is too early to tell at this time.
Another indicator I have posted is the Money Flow Indicator. I have also drawn a horizontal line of support on that indicator BAC seems to be holding over. This is bullish going forward if it responds with a support hold there, and up test coming in the days ahead.
Keep in mind you are playing in a dangerous sector still right now, so tight SL’s should be used for short term traders.
Keep track of any changes by checking in daily to www.kingofalltrades.com/community and asking other like minded investors their opinions as well as sharing your own.
Disclosure: No Position BAC
