4 Trade Ideas for Bank of America: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

Bank of America, $BAC, had finally retraced 61.8% of the drop from the Great Financial Crisis and was bumping along that level when the COVID-19 virus made itself known. It gapped down February 21st and then continued to a low last week at the 38.2% retracement. It took a big move lower Thursday and then recovered that move and some Friday to end back over the 38.2% level and into the gap.

The RSI moved up out of oversold territory and to a higher high on the Friday move and the MACD turned up but remains negative. There is resistance at 25 and 26.25 then 27.50 and 29.65 before 30.25 and 31. Support lower comes at 22.75 and 21.75 the 20. The stock pays a dividend with a 2.98% annual yield and started trading ex-dividend March 5th. The company is expected to report earnings next on April 15th.

The March options chain shows large open interest from 25 to 28 on the put side and at 27 and 29 but bigger at 31. In April open interest is biggest on the put side at 25 and at 29 on the call side. The May options have open interest spread out but big at the 23 and 27 put strikes as well as at the 26 call.

Bank of America, Ticker: $BAC

Trade Idea 1: But the stock on a move over 24.50 with a stop at 23.

Trade Idea 2: But the stock on a move over 24.50 and add an April 3 Expiry 24/21 Put Spread ($1.80) while selling a May 28 Call ($1.10).

Trade Idea 3: But the April/June 28 Call Calendar (90 cents).

Trade Idea 4: But the June 15/29 bull Risk Reversal (free).

Premium Content

The Best

The Rest Premium

Free Content

The Rest

If you like what you see sign up for more ideas and deeper analysis using the Get Premium button above.   

After reviewing over 1,000 charts, I have found some good setups for the week.  These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which after a week of previously unseen price action that saw wild daily swings and huge volume, the equity markets entered a Bear Market.

Elsewhere look for Gold to continue its pullback while Crude Oil pauses in its drop. The US Dollar Index looks to continue to move back higher while US Treasuries pullback in their uptrend. The Shanghai Composite looks to consolidate under resistance while Emerging Markets move lower.

The Volatility Index looks to remain extreme making the road for equities bumpy and wild. The Equity Index ETF charts are damaged with all holding below their 200 day SMA’s. The longer timeframes are now also favoring the bearish path. The lone bright spot was a big rally in the last 30 minutes to end an historic week. Use this information as you prepare for the coming week and trad’em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

blog comments powered by Disqus
Dragonfly Caps Blog