Chart of the Day: It Could Be the Time to Buy the Dip in This Holding
The stock reflects the poor sentiment in financials, however the economy remains robust.
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Typical of the banks recently we have seen many of the financial names try to make breakout moves to the upside, only to fail badly. Bank of America (BAC) , of course, is one of those big banks that dominates the retail business along with mortgage underwriting. BAC has pulled back nicely to some solid support and that makes a purchase now pretty compelling.
No question the chart shows bearish qualities; the candles are purple/pink, which are bearish on the GoNoGo composite of indicators. However, we don't believe this is a condition to worry about longer term. Recent pullbacks have been terrific buying opportunities in BAC. This may just be one more of them.
Indicators are mixed, the ADX (pane 3) is starting to rise, and stochastics (pane 5) is curling up, so we may have some momentum here. We also see positive money flow (barely), but after the recent selloff it is nice to see big money is not flowing out of the stock.
The $50-52 level seems solid. It was worth waiting a few days to make sure that was the case, but on several occasions in January and back in November this level held firm.
We like Bank of America in TheStreet Pro Portfolio and rate it a Two, or "stockpile on pullbacks" (like, right now!).
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At the time of publication, TheStreet Pro Portfolio was long BAC.
