Bank of America Corporation, through its subsidiaries, provides banking and financial products and services for individual consumers, small and middle-market businesses, institutional investors, large corporations, and governments worldwide. It operates through four segments: Consumer Banking, Global Wealth & Investment Management, Global Banking, and Global Markets.
Take a look at the 1-year chart of Bank (NYSE: BAC) below with the added notations:
BAC is currently trading where it was back at the end of February. Since that time, the stock has created a key price level at $24 (blue) that has provided both support and resistance for BAC. Now that the stock is hitting that level again, traders should expect a pullback.
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The Tale of the Tape: BAC has a key level at $24. Traders could enter a short position on a test of $24, with a stop placed above that level. Traders that are bullish on the stock could enter a long position on a break above that level instead.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.
Capital preservation is always key!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach