Bank of America Shares Give Bulls Hope

Updated for latest share price, notes Dec. 4 close at $16.28.

NEW YORK ( TheStreet) -- Bank of America ( BAC) finished Tuesday back above $16, extending a recent rally and offering hope for breakout bulls.

Financials were largely left out of the year-end Santa Claus rally. Though Bank of America shares touched above the $16 mark during three December trading sessions, they closed down on two of them. The stock did finish at $16.28 on Dec. 4 as part of the heavy trading that followed news of its plan to repay $45 billion in TARP funds on Dec. 2, and then the strong pricing of its subsequent equity offering on Dec. 3, but the shares proved unable to hold onto those gains as the year drew to a close, even briefly pulling back to close below $15, where its stock offering priced, on Dec. 17.

On Tuesday, however, Bank of America shares added 51 cents, or 3.3%, to close at $16.20. At that level, the stock was up 7.6% for the year, ahead of its fourth-quarter report, due on Jan. 20, that may show credit costs have peaked, as CEO Brian Moynihan assured colleagues at an event earlier this week.

"The worst is behind us in the sense of credit," Moynihan said on Monday.

The finish above $16 on Tuesday had the stock once again threatening to move more than 5% above its 200-day moving average of $15.57, although the shares were pulling back slightly in early action Wednesday, losing 3 cents to $16.17.

There is some recent precedent for a run-up ahead of the quarterly report. Bank of America issued its third-quarter results on Oct. 16. The day before the release, its stock rallied as high as $19.10 in intraday trading. It marked a high point for the shares in 2009, a level not seen since November 2008. Roughly two weeks prior to the third-quarter report, on Oct. 1, the stock had closed at $16.21, a finish that was its lowest since August 12 when it closed at $15.93. The stock then rose in seven of the 10 trading sessions spanning from Oct. 1 through Oct. 15.

Analysts polled by Thomson Reuters are expecting Bank of America to report a loss of 50 cents a share in the December quarter, but Wall Street is decidedly bullish on the stock, with 19 of the 25 analysts covering the company rating it at buy (10) or strong buy (9).

-- Written by Lauren Tara LaCapra in New York.

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