Will Bank of America Experience Another Round of Selling?
JFD Team | Jul 14, 2021 07:06AM ET
Bank of America (NYSE:BAC) traded lower on Tuesday, after hitting resistance at 40.80 on Monday. Overall, the stock continues to trade below the downside resistance line drawn from the high of June 3, but it has been struggling to fall below 38.50, a territory that attracted some buying interest on June 18 and July 8. That’s why we will adopt a cautious stance for now.
At the time of writing, the bank announced its earnings results with earnings per share (EPS) higher than the consensus, but also with revenue missing its own estimate. In our view, even it this allows some buying after the opening bell, the recovery may still stay limited near the 40.80 territory, or the aforementioned downside line. Another round of selling may be possible from there, with a break below yesterday’s low of 39.60 having the potential to open the path for another test near the key 38.50 barrier. If that barrier is not able to halt the slide this time around, its break may pave the way towards the low of Apr. 21 at 37.40.
Taking a look at our short-term oscillators, we see that the RSI ticked down from near its 50 line, while the MACD, although above its trigger line, shows signs of topping within its negative territory. Both indicators suggest that the stock may start gathering negative speed sometime soon, which supports somewhat the idea of seeing further declines in the short run.
In order to start examining whether investors have become more interested in this stock, we prefer to wait for a break above 40.80. This may also signal a break above the aforementioned downside line and perhaps allow advances towards the 41.95 zone, which provided resistance on June 16, 17 and 29. If that area is not able to halt the advance, the next level to consider as a potential resistance may be the high of June 10, at around 42.95.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.