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Nearest Resistance: $9.60
Nearest Support: $8.75
Catalyst: Redemption of Trust Securities
>>5 Leanest and Meanest Bank Stocks
Bank of America(BAC - Get Report) is having a good day today. Shares of the big bank are up nearly 2% after announcing that it would be redeeming $5.13 billion in trust securities, income investments that banks have historically issued to build their Tier 1 capital. New regulatory changes have made trust securities a less attractive deal for banks, so BofA's decision to redeem the securities is good news for investors. It means that BofA isn't paying out interest rates as high as 7.83% anymore.
From a technical standpoint, Bank of America looks interesting as well. While shares hit resistance in early September at $9.60, shares have recovered for the last month, setting up for another attempt at taking out that $9.60 resistance level.
While I'm not a big fan of the big banks for fundamental reasons (namely black-hole balance sheets), traders may want to jump into BAC if shares break out above $9.60.
Bank of America also shows up on a recent list of
10 Most Profitable Banks Trading Below Book Value.