Bank of America Stock Chart Shows Buying Opportunity Is Near

NEW YORK (The Street) -- Bank of America  (BAC) has been on a roll this month. Today, shares are building on yesterday's 1.35% gain with another 1.7% uptick. 

This surge has pushed the stock well above its May high and has set the stage for a retest of a major level, its 2014 high of $18.20 and early 2015 high of $18.05. The stock is a buy on weakness in the near term.

The powerful June move, which has lifted BAC 6.5% above its May close, has left behind multiple layers of support. The initial layer is last week's high at $17.35. Slightly below is a more solid support area near the May peak of $16.85. If BAC is in need of a pullback prior to retesting its yearly peak, a dip back down to last week's high may be all that is needed to recharge the rally.

Bank of America is not yet in overbought territory according to its moving average convergence-divergence indicator, but it will likely enter this reading once the $18 area is pierced. A healthy pullback after a retest of the 2014/2015 highs is very likely.

Until then, the stock appears to be on a steady course higher. A short-term consolidation, similar to the bull flag in late May, would offer a low-risk entry opportunity. Investors who prefer not to chase should remain focused on last week's high.

Click here to see the below chart in a new window. 

At the time of publication, Morrow was long BAC.

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