Monday, 17 October 2016

BAC - earnings were... reasonable

Whilst the broader market closed moderately weak, Bank of America saw a day of swings, settling +0.4% @ $16.06. Near term outlook offers the mid $16s, but if the main market weakens <sp'2100, BAC will cool to the 15.50/00 zone. Broadly, the $18 threshold remains powerful multi-year resistance.

BAC, daily

BAC, monthly


Suffice to add... earnings were reasonable, in what remains one of the better US financials.

Higher rates would really help the financials. A Fed rate rise at the Dec' FOMC remains on the menu.

However, it should be clear that 'data dependency' at the Federal Reserve is primarily based on equity prices. If the broader market ends October on a bad note, that'd bode for a rough November.

Any break to even the low sp'1900s would effectively take a rate hike off the menu, and that would wreck the remainder of the year for BAC, and almost all other financials.

Seen on the giant monthly cycle, the $18 threshold remains massively important. The more conservative 'bullish chasers' will remain waiting until a monthly close >18.