Shares of finance name Bank of America (BAC) are falling deep in the red this afternoon, down 1.6% at $45.26, at last check. Though the catalyst for today’s pullback is unclear, the equity is just one month off a post-earnings pullback, in which investors brushed off the company’s fourth-quarter profit lift. Now clinging to its 2.8% year-to-date gain, a flashing historic bull signal could suggest a much-needed boost is in the works for BAC.
Per Schaeffer’s Senior Quantitative Analyst Rocky White, Bank of America stock has come within striking distance of its 80-day moving average after a lengthy period above it (defined by White as 80% of the time over the past two months and 8 of the last 10 trading days). This has occurred four other times over the last three years, after which the stock was higher one month later every time with an average 6.75% return. From its current perch, a move of similar magnitude would put BAC shares above $48 — at a fresh two-year high.
Now looks like an affordable time to make a move with options, too. This is per the stock’s Schaeffer’s Volatility Index (SVI) of 21%, which ranks in the low, 14th percentile of its annual range.
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