It’s not a great day for the banks, even though this group has been a relative strength leader in recent weeks.
Will the results be enough to elevate the group? Will the bank be enough to help give the Dow Jones Industrial Average a boost?
Let’s look at how the charts are setting up.
Trading Bank of America Stock
As I said when I recently previewed JPMorgan’s results, it’s not uncommon for the banks to have a “sell the news” reaction.
That’s even on good results and even more so with the stocks hitting highs.
For Bank of America stock, we’re seeing a three-day dip, with support coming into play from the 21-day moving average and the $42.50 area.
I’d love to see Wednesday’s low hold as support when the Charlotte banking giant reports on Thursday.
A break of this low that isn’t reclaimed puts the 50-day moving average in play, followed by $40.
A move below $40 could put the 10-month and 200-day moving averages on the table.
After the report, we may get some volatility. But the upside is simple for me, as I’m watching the $43.50 area.
A move above that mark puts Bank of America stock not only back above the 10-day moving average, but also above the second-quarter high and breakout level.
That would open the door to the highs near $45, then the 161.8% extension up at $46.70.
What we’re looking for is a continuation of what has been a bullish trade.
If that trade is about to unwind, we don’t want to be caught on the wrong side. Keep $43.50 in mind on the upside and Wednesday’s low in mind on the downside.