Bank of America
Meanwhile, Bank of America (BAC) has been sporting a pattern opposite Apple's for the last several months. BofA has been rallying higher in an uptrending channel, a move that's propelled the big bank more than 61% higher in the last six months. And now, Bank of America could have further to run.
It doesn't take an expert technical analyst to figure out what's going on in Apple - this chart is about as simple as it gets. There's a glut of buyers sitting underneath that trendline support line in BAC -- and it's spurred reversals the last three times shares approached the trendline. Those support and resistance levels give us a high probability range for this stock to trade within. And as you might expect, the ideal time to be a buyer is on a bounce off of support.When you're looking to buy a stock within a trend channel, buying after a bounce off of support makes sense for two big reasons: it's the spot where shares have the furthest to move up before they hit resistance, and it's the spot where the risk is the least (because shares have the least room to move lower before you know you're wrong). The 50-day moving average has been a good proxy for support over the course of the pattern - that's where I'd recommend putting a protective stop on this trade.
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