Bank of America (BAC) - Get Bank of America Corp Report is breaking out of a 10-week consolidation Tuesday. The stock is up just shy of 3% and is beginning to put some distance on a very heavy resistance zone near $23.50. As Bank of America builds on Tuesday's momentum, a major support zone is being left behind. With a base this solid underneath, the stock is set up well for more upside.

Bank of America first reached the $23.50 area back in early December as the initial phase of the post-election rally began to run out of steam. After surging more than 35% from its Nov. 8 low, the stock was in need of a healthy rest. Over the last 10 weeks, that's exactly what Bank of America got. The stock moved sideways during this phase while its extremely overbought MACD (moving average convergence/divergence) indicator returned to neutral. Another positive was Bank of America's ability to maintain its string of higher monthly lows. As we enter mid February, the stock is tracing out its 8th straight one. Certainly a very bullish set up, and a strong indication of more upside ahead.

In the near term, Bank of America investors should take on a more positive view of the pattern. The stock now has a major support zone developing that runs from the $24.00 to $23.00 area. It would take a close back below the $22.40 area to derail Tuesday's breakout. On the upside, Bank of America has plenty of room to run. A fresh rally leg could carry shares all the way up to the $26.50 area without running into significant resistance. This key level marks the stock's 10-month moving average. Bank of America has been trading below this long-term indicator since October of 2008. It would take another 10% of upside from current levels for this area to be reached. Profit taking here, at least partial, would be wise.

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Long BAC