Boston, MA 09/15/2014 (wallstreetpr) – Bank of America Corp (NYSE:BAC) (Closed:16.79, Up:1.33%) has been rallying for the last three session on the back of multiple positive issues like an upgrade from “Neutral” to “Buy” by Goldman Sachs and a new investment product created to take advantage of the coming IPO of Alibaba. The daily candle formation was near perfect bullish Marubozu, implying the inherent strength and helped by a lot of interest from the investors, as evident from being the most active stock of the week. The Friday volume of 116 million superseded the average volume of 69 million by a good margin.
Counted among the most respected stocks, Bank of America Corp (NYSE:BAC) had made its life high at $55 in early 2007 and the rest of the journey was mostly downhill. The government bailout in 2008-09 was the reason the company survived and bounced sharply to make a top at $19.86 by 2010 before falling again. This next fall took it to sub-$5 levels in 2011 but since then it has been in an uptrend and the March 2014 top at $18 doesn’t look like the final top yet.
The first correction in this rally from $4.92 came in 2012, falling by about 3.50 points. The last fall in April-May 2014 has been of the roughly same magnitude and along with the long term channel support, suggests a continuation of the rally in the coming months. Though a bit of selling pressure may be expected from $18-20 levels, that supply would probably be absorbed by the buyers.
The long term structure is coming to a decisive point now. A high above $19.86 will open the door towards $23 and even $29 levels but a failure to register a higher high may keep it rangebound in the band of $10-$20.
In the short to medium term, investors can expect 15-20% return on this stock and may use any dip to invest in with a stoploss below $14.50.
