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A global banking giant that insiders are loading up on here is
Banks of America(BAC - Get Report), which provides various banking and financial products and services to individual consumers, small-and middle-market businesses, institutional investors, corporations, and governments in the U.S. and internationally. Insiders are buying this stock into some major strength, with shares up 45% so far in 2012.
Bank of America has a market cap of $87.4 billion and an enterprise value of $145.98 billion. This stock trades at a cheap valuation, with a forward price-to-earnings of 8.03. Its estimated growth rate for this next quarter is -71.4%, and for next year it's pegged at 71.2%. This is far from a cash-rich company, since the total cash position on its balance sheet is $643.88 billion and its total debt is $701.83 billion. After you back out the cash, Bank of America has a total of $57.95 billion in total debt on its books.
A director just
bought 482,794 shares, or around $3.55 million worth of stock, at $7.36 per share.>>5 Big Financial Stocks to Buy in June
technical perspective, BAC is currently trading above both its 50-day and 200-day
moving averages, which is bullish. This stock just started to trigger a near-term breakout since shares have moved above some overhead resistance at $7.90, and above its 50-day moving average of $7.78 a share. This move is pushing BAC within range of triggering another near-term
If you're bullish on BAC, then I would look for long-biased trades once this stock breaks out above some near-term overhead resistance at $8.39 a share with high volume. Look for volume on that move that registers near or above its three-month average volume of 223 million shares. If we get that action soon, then look for BAC to re-test and possibly take out its next significant overhead resistance levels at $9.17 to $10.09 a share. Keep in mind, that traders can also buy BAC and anticipate the breakout as long as it's trending above its 50-day with strong volume.
I would simply avoid BAC or look for short-biased trades if it fails to trigger that breakout, and then drops back below its 50-day moving average of $7.78 a share with high volume. A high-volume move below that level would setup BAC to re-test and possibly take out its 200-day moving average of $7.17 a share.
Bank of America, which shows up on a list of
5 Bank Stocks Wilting Under the Summer Sun, was also featured recently in "
5 Breakout Stocks to Buy on This Bounce."