While Goldman Sachs (GS) – Get report Attracts Investor Attention on Wednesday, That Attention Will Soon Shift to Bank of America (BAC) – Get report on Thursday when the company reports earnings before trading begins.
Bank of America follows others like Wells Fargo (WFC) – Get report and JPMorgan Chase (JPM) – Get reportand reports with Morgan Stanley (em) – Get report.
Price action has been mixed for the sector, perhaps making things a little more difficult for Bank of America traders.
Investors still view stocks, and the sector, with skepticism. While the rebound in the low has been notable, it certainly has not been as strong as other parts of the markets.
With the latest rebound, Bank of America has retreated just 38.2% of its coronavirus sale (although it recovered the 61.8% retracement by one point, before falling in June). Let’s take a closer look at the charts.
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Trading Bank of America Stock
Daily chart of Bank of America shares.
Graphic courtesy of Stockcharts.com
Bank of America shares soared sharply from the $ 20 level in mid-May, raising shares to $ 29. However, the 200-day moving average and 61.8% retracement hampered the rally as stocks they backed away quickly, and then slowly descended.
However, in recent trades, the bulls have made a charge. Shares rebounded 5.5% on July 10, rebounding strongly on the uptrend support (blue line) and setting the stage for the stock to claim the 20- and 50-day moving averages.
On the upside, the $ 25.50 area is pretty key. This is a multi-year support brand that we have been monitoring for quite some time. It’s also close to where the 200-week moving average comes in. When this area failed to support, it helped us avoid a major shock to the stock price.
For Bank of America actions to erase this level would be significant. It would open up the possibility of a run to the $ 28 to $ 29 area. There you would find several notable marks, including the June highs, the 61.8% retracement and the 200-day moving average.
On the downside, I don’t want to see Bank of America drop below its 50-day moving average and uptrend support. Doing so puts the 23.6% retracement at stake near $ 21.90, followed by the May low at $ 19.96.
However, based on the reaction of the majority of the banking industry, I do not expect a major breakdown in Bank of America shares immediately after reporting earnings. However, if it decreases, at least we will know where the support is.
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