Bank of America: It's All You Need to Know

"There were two purposes for buying bank stocks, one was potential for growth, and the other was safety and fairly large dividends," says Keetle. "Now it's just the earnings potential going forward and the growth potential there, because the dividends are pretty much zero, and the safety is gone."

Still, Keetle agrees that Bank of America has "certainly become more of an indicator" of the economy and banking sector.

Richard Bove, a bank analyst at Rochdale Securities who holds a buy rating on BofA shares, upgraded his price target over the weekend to $19 from $14. His explanation, in effect, used the company as an indicator of the industry.

Bove cited improved confidence, which he believes will help the banking industry, and therefore push up the price-to-earnings ratio on BofA shares. He added that support of BofA management, like CEO Ken Lewis, has improved as well, and that it "is becoming increasingly apparent" that Countrywide and Merrill were smart acquisitions.

"Driven by hysteria and unfounded fears, the multiples on bank stocks collapsed and the price of Bank America's stock plunged to a low of $2.53 per share," he wrote. "It is now being conceded, by even the most bearish observers, that claims that the industry was insolvent were incorrect and, therefore, banking will survive and possible thrive."

The key question for investors is whether BofA's share price has more room to grow in the immediate future. Its vast exposure to fragile consumers, as well as its thorny acquisitions, may prove bountiful, but also make the bank a relatively risky bet in the near term.

Chris Armbruster, senior research analyst at Al Frank Asset Management, says investors are using the stock as a source of direction for the economic crisis, whether or not they hold a position. If BofA, which went through what Armbruster calls a "near-death situation," can make it out alive and well, it will boost confidence across the sector, especially for firms that are better capitalized with less severe asset problems.

Still, the analyst considers BofA one of the riskiest plays among banking titans, with JPMorgan on the safest side, and Wells Fargo somewhere in the middle. While he believes the stock has room to grow, and his firm holds it on the conviction buy list, Armbruster is less certain that growth will occur any time soon.

"It's a leveraged way to play the banking sector, because if things go well, Bank of America will outperform," he says. "And if things go poorly it could significantly underperform."

Even Munson, who calls BofA "a winner" and "the most solid choice," has to concur.

"If it breaks $10," he says, "all hell breaks loose."

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