Bank of America Has Pulled Back Hard
Financials were one of the best performing sectors after the Pfizer vaccine news on November 9. They’ve pulled back in the last two weeks, creating a potential opportunity in one of the biggest and most liquid names: Bank of America.
BAC is trying to hold $30. Aside from its “round number” status, this level is potentially important for a few reasons.
First, it was a resistance line for almost two weeks in late December and early 2021.
Second, it’s almost exactly the 38.2 percent retracement level based on BAC’s move between the low on September 24 and its high on January 14.
Third, the 50-day simple moving average (SMA) has been rising quickly and is now just $0.12 below $30. In fact, BAC’s low today was just $0.03 above it.
Finally, stochastics are back toward oversold levels.
Given the sharpness of its pullback, BAC may need to consolidate before bouncing. However its exposure to the broader economy, low valuations and liquidity (especially for options traders) makes it a potential go-to stock if the “reopening” trend resumes. Traders may want to watch for a potential bounce in coming weeks.
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BAC is trying to hold $30. Aside from its “round number” status, this level is potentially important for a few reasons.
First, it was a resistance line for almost two weeks in late December and early 2021.
Second, it’s almost exactly the 38.2 percent retracement level based on BAC’s move between the low on September 24 and its high on January 14.
Third, the 50-day simple moving average (SMA) has been rising quickly and is now just $0.12 below $30. In fact, BAC’s low today was just $0.03 above it.
Finally, stochastics are back toward oversold levels.
Given the sharpness of its pullback, BAC may need to consolidate before bouncing. However its exposure to the broader economy, low valuations and liquidity (especially for options traders) makes it a potential go-to stock if the “reopening” trend resumes. Traders may want to watch for a potential bounce in coming weeks.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
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