Friday, April 13, 2012

Strong Technicals Make BAC Worth the Risk BofA flashed golden cross with stochastic buy signal pending

Bank of America (NYSE:BAC) – This is the second largest U.S.-based financial holding company with global assets of $2.13 trillion. Recent reviews by Wall Street analysts have resulted in an upgrade of Bank of America. Earnings for 2011 were just 1 cent, but estimates for 2012 are 72 cents, and $1.08 in 2013. And several analysts cite a stronger balance sheet as an evolving development.

While BAC is a higher-risk investment than many regional banks, it could bring investors a greater reward.

Technically BAC bottomed in December, and began a bull channel that has roughly held on its 50-day moving average now at $8.50. A golden cross (bullish long-term indicator) was flashed in March, and currently the stochastic is hooking up for a pending buy signal. The target for BAC is $14.

The company pays a small dividend, but also has many preferred issues outstanding like the BAC.PRJ, which is a 7.25% PFD callable anytime after Nov. 1, 2012, at $25. It closed yesterday at $24.55.


Trade of the Day – Bank of America (NYSE:BAC)
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