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, comes into the week approaching resistance from the 2022 top and filling the gap from October 2008 (not a typo), a nearly 17 year closing high. The RSI is in the bullish zone with the MACD positive and rising. The Bollinger Bands® are starting to open higher. There is resistance higher at 50 and 51 then 52.75 and 54 before the all-time high at 54.90. Support lower sits at 48.50 and 48. Short interest is low at 1.2%. The stock pays a dividend with an annual yield of 2.26% and will begin trading ex-dividend on September 5th.

The company is expected to report earnings next on October 15th. The September options chain has biggest open interest at the 45 put strike and at 50 on the call side. In the October chain open interest is biggest at the 43 put and builds from 46 to a peak at 50 before falling back on the call side. Finally, in the November chain open interest is biggest at the 46 put strike and the 50 call.

Bank of America, Ticker: $BAC

Trade Idea 1: Buy the stock on a move over 50 with a stop at 48.

Trade Idea 2: Buy the stock on a move over 50 and add an October 48/43 Put Spread (95 cents) while selling the November 55 Calls (57 cents).

Trade Idea 3: Buy the September/October 52.50 Call Calendar (58 cents) while selling the October 45 Put (56 cents).

Trade Idea 4: Buy the November 45/52.50/57.50 Call Spread Risk Reversal (9 cents).

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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 with one week left in August and the Jackson Hole Fed Conference in the rearview mirror, saw equity markets finish strong after a continued slosh to the downside early.

Elsewhere, look for Gold to continue toward the top of consolidation in its uptrend while Crude Oil drifts in consolidation. The US Dollar Index continues to base in the intermediate term move to the downside while US Treasuries continue to consolidate in their downtrend. The Shanghai Composite looks to continue a new uptrend after breaking the broad consolidation area while Emerging Markets continue their uptrend.

The Volatility Index looks to continue at low levels making life easier for equity markets to the upside. The charts of the SPY and QQQ continue to look strong on both timeframes, with the SPY closing at a new all-time high. The The QQQ has one more plateau to clear to join the SPY and even the IWM jumping after clearing resistance to finish at an 8 month high. 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.

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