Bank of America Corp (NYSE:BAC) HEFFX Highlights

Bank of America Corp (NYSE:BAC) HEFFX Highlights

Bank of America Corp (NYSE:BAC) HEFFX Highlights

  • Warren Buffett’s Berkshire Hathaway will exercise warrants in Bank of America allowing it to acquire 700 million common shares at an exercise price of $7.14 each, or about $5 billion.
  • At Thursday’s closing price, that stake is worth more than $17 billion.
  • Berkshire will also become the bank’s largest shareholder.
  • BAC is trading sideways, suggesting market indecision.
  • Federal Reserve did raise rates but we are still looking at a flatter yield curve scenario that could complicate matters for BAC bulls.
  • BAC below 22.30 would imply a need for repositioning in the stock but the long view remains encouraging for those with proper positioning.
  • Bank of America announced Wednesday a 60 percent boost in its quarterly common stock dividend, the latest sign of improving health at the Charlotte-based bank.
  • The announcement was among a flurry of similar disclosures by other large banks that won clearance Wednesday from the Federal Reserve to return more capital to investors following the regulator’s latest “stress tests.”
  • Ever since taking over as CEO of Bank of America (NYSE:BAC), one of Brian Moynihan’s top priorities has been to reduce the dilution to shareholder value that occurred during the financial crisis. The bank has been chipping away at this with modestly sized buyback programs over the last few years, but on Wednesday, it doubled down by announcing a significant increase to its current repurchase authorization.

Bank of America Corporation is a bank holding company and a financial holding company. The Company is a financial institution, serving individual consumers and others with a range of banking, investing, asset management and other financial and risk management products and services. The Company, through its banking and various non-bank subsidiaries, throughout the United States and in international markets, provides a range of banking and non-bank financial services and products through four business segments: Consumer Banking, which comprises Deposits and Consumer Lending; Global Wealth & Investment Management, which consists of two primary businesses: Merrill Lynch Global Wealth Management and U.S. Trust, Bank of America Private Wealth Management; Global Banking, which provides a range of lending-related products and services; Global Markets, which offers sales and trading services, and All Other, which consists of equity investments, residual expense allocations and other.

Overall, the bias in prices is: Upwards.

Short term: Prices are stalling.

Intermediate term: Prices are ranging.

Note: this chart shows extraordinary price action to the upside.

The projected upper bound is: 25.36.

The projected lower bound is: 23.21.

The projected closing price is: 24.28.

BANK OF AMERICA closed down -0.060 at 24.260. Volume was 4% below average (neutral) and Bollinger Bands were 4% narrower than normal.

Open         High          Low           Close         Volume
24.620      24.620      24.170      24.260      84,005,160

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period        50-period          200-period
Close:                       23.49               23.40                 21.70
Volatility:                29                     29                       30
Volume:                  84,399,832     80,966,048      97,979,936

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

BANK OF AMERICA is currently 11.8% above its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into BAC (mildly bullish). Our trend forecasting oscillators are currently bullish on BAC and have had this outlook for the last 2 periods.

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 83.5616. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 3 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 62.29. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 53 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 144.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 12 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 1 period(s) ago.

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John Heffernan

John Heffernan is a Junior Analyst at HEFFX. John is studying Economics and is a contributor on equities at Live Trading News.

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