Saturday, July 25, 2015

Bank of America (BAC) Disappoints Investors Hoping For A Breakout This Past Week - Weekly Resistance Still in Place

Despite BAC apparently breaking and closing above resistance temporarily on a daily chart, by week's end it fell back to close at a loss with weekly resistance still in place as shown below.

click chart to enlarge

As as an intermediate to long-term investor, in my opinion it is often very beneficial to pay attention to weekly chart patterns as a means of confirming breakouts.

BAC may still eventually close above weekly resistance, but at this point if I was interested in owning BAC, I would not yet be convinced to buy it based on technical analysis alone. This is because I would want to use the current resistance line as support after a weekly close above it.  Then I would own BAC as long as there was not weekly close below it. And in the longer term based on additional technical analysis,I would hopefully establish higher levels of support to protect any capital gains while collecting dividend payments.

Again this is not investment advice to either buy or sell BAC.  It is just an educational example of how I would use technical analysis to establish a buy and protect strategy on this stock if BAC was an appropriate investment for me. I have no idea if BAC is an appropriate investment for you - so if you cannot make your own decisions please hire an investment adviser - see more below.

Not Investment Advice | Important Disclaimer: 
The content in this article, including the identification and discussion of any specific security (e.g., bond fund), is NOT meant to be and should NOT be construed and/or used as investment advice. This article is for general information and educational purposes only. Please read the Disclaimers  for in their entirety. The U.S. Securities and Exchange Commission website has guidance on selecting an investment adviser.

Financial Disclosure:
The author/publisher has no position (long or short) in BAC at the time this article was written. This position may change depending on future price action.

 Base Chart Provided Courtesy of  Analysis and Annotation by JunkBond (all rights reserved)

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