Since the beginning of 2014 shares have traded between the low of $14.17 set on May 16, 2014, and the high of $18.48 set on July 22, 2015. This range has been around the stock's 200-day simple moving average crisscrossed by the 50-day simple moving average five times, the latest being a "death cross" confirmed on Oct. 7.
The bank, which reports earnings before the opening bell on Wednesday, has not been able to recapture what it lost during the Aug. 24 flash crash on "Black Monday."
Here's how to trade the stock.
Analysts expect Bank of America to earn 34 cents a share. The banking giant is one of the banks that will be affected by potential new measures Hillary Clinton would like to put in place if elected President. This includes breaking up the banks considered "too big to fail." The bank may continue the early trend in earnings, beating on earnings-per-share but missing on revenue,
Here's the daily chart for Bank of America.
Courtesy of MetaStock Xenith
Bank of America currently trades around $15.50, down 13.5% for the year to date and in correction territory 16% below its multiyear intraday high of $18.48 set on July 22.
Investors looking at the chart can clearly see the trading range of 30% between the low of $14.17 set on May 16, 2014, and a high of $18.48 set on July 22, 2015.
Note that since 2014 began there was a false "death cross" on June 11, 2014, a false "golden cross" on Oct. 3, 2014, a false "death cross" on March 11 and a false "golden cross" on June 24. This is a warning that the current "death cross" confirmed on Oct. 7 could also be false. This is a characteristic of a stock in a trading range and not ready to trend higher or lower.
The most important observation is the decline of 21% from the July 22 high of $18.48 to the "Black Monday" low of $14.60 has only been recovered by 6.3% with the stock below the Aug. 24 high of $15.98 and below the 50-day and 200-day simple moving averages of $16.32 and $16.46, respectively.
Here's the weekly chart for Bank of America.
Courtesy of MetaStock Xenith
The weekly chart is negative with the stock below its key weekly moving average of $15.92 and above its 200-week simple moving average of $13.45 which was last tested during the week of April 26, 2013 when the average was $11.74.
The weekly momentum reading is projected to decline to 28.10 this week down from 30.44 on Oct. 9.
Investors looking to buy Bank of America should place a good till canceled limit order to purchase the stock if it drops to $13.89, which is a key level on technical charts until the end of this week.
Investors looking to reduce holdings should place a good till canceled limit order to sell the stock if it rises to $17.30, which is a key level on technical charts until the end of October.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.