Posts
BAC had a breakout from the handle of the double-bottom pattern today, taking out the buy point (12.73) on a larger volume than yesterday. Target price $14.56. GL if you are trading.
-------------------------------------------------
Negative sentiment of November dissipated as soon as December hit (just like the head and shoulders pattern that everyone was watching was negated as soon as September hit).
Financial woes in Europe continue, and the US had the largest November monthly deficit on record. If you read the financial news, buying the stocks of financial institutions should be the last thing on your mind.
But guess what? They are the ones leading the market up. Here's Bank of America, whom many think may go Lehman pretty soon. Whatever their fundamental problem is (bad, very, very bad), the stock chart shows a clean double bottom pattern with the target price of $14.56, over 14% gain from the current price.
A buy point would be the middle of "W", which is $12.73. It could form a handle right about now, and if it does, the buy point would be still $12.73. RSI and MACD both show positive divergence.
If you don't worry about the fundamentals and don't worry about factors outside the control of the bank or of the US government (such as Ireland decides to default instead, or China's bubble suddenly bursts), it may be a quick trade if the breakout from the current level happens, with a very tight stop.
I have no intention of touching banking stocks and I certainly do not recommend any such stocks, but if you are interested in gambling on Wall Street banks, BAC seems to be one of the less extended. C is too extended, and GS doesn't look constructive. JPM and MS look range-bound, and they are both at the top end of the range. Do your DD.
No comments:
Post a Comment