BANK OF AMERICA One last low and off to the races?Bank of America (BAC) got heavily rejected in early November on its 1W MA50 (blue trend-line) and hasn't recovered since, staying for the whole December below even the 1W MA200 (orange trend-line). This is not the first time we see such price action from Bank of America.
As you see on this chart, ever since the November 2011 Low, the stock has been trading within a Fibonacci Channel, with the extensions serving as very accurate Resistance and Support levels. We have seen 1W MA50 rejections after strong corrections in April 2016 and June 2020. Each of those times, the price hit the Buy Zone (green) before rebounding to a Higher High, while the RSI on the 1M time-frame hit the 38.80 Support. The 1M MA100 (red trend-line), which on March 2020 provided Support, is currently exactly at the top of the 10 year Buy Zone.
As a result, BAC is a buy opportunity, either on the next Low, or if it doesn't make and rebound earlier, if we close a month above the 1W MA50. As far as a long-term target is concerned, the first Higher High on the Fibonacci scale was made on Fib 2.0 (March 2014), the second on Fib 4.0 (March 2018) and the third on Fib 6.0 (January 2022). Investors could hold, based on this sequence, until the 8.0 Fibonacci extension.
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