Wednesday, July 17, 2013

BAC Bank of America Weekly and Daily Charts Rising Wedges Overbot Negative Divergence Doji's Earnings Imminent

BAC is the next bank earnings on tap for this morning. WFC, JPM, C and GS yesterday are all in line with estimates which would be expected. The charts, overall, on a weekly basis point to banking and financial sector weakness for the weeks ahead despite any near-term joy. Interestingly, GS popped on its earnings release yesterday morning and then faded away as the session played out finishing flat. The BAC daily chart shows an upward channel with some further space available to the top rail. Yesterday's candlesticks on both charts are doji's signaling a trend change but follow through to the downside would be needed today to verify the doji. The daily chart has some near-term momo due to the MACD line and histogram but price should reverse from the red circle due to the negative divergence. The 20-day MA is under the 50-dya MA which is bearish.

The weekly chart shows a clearer picture forward. The red rising wedge, overbot conditions and negative divergence indicate that BAC is topping now and should roll over moving forward. The drops out of rising wedges can be quite dramatic. Earnings will likely be in line or beat and a pop into the red circle may occur but overall, moving forward for the weeks ahead, BAC would be expected to move sideways to sideways lower with a potential sharp drop lower over the next few months from the rising wedge. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

Note Added 6:48 AM:  BK (Bank of New York Mellon) earnings beat setting a happy tone for banks so far.

Note Added 7:23 AM:  BAC beats handily on bottom line EPS but is short on top line revenue 22.7 billion versus 22.8 billion. The challenged top line revenue scenario may continue for stocks in general this earnings season. BAC moves higher pre-market to 14.06 up about one percent printing inside the red circle.

Note Added 7:32 AM:  BAC is a yo-yo, now negative.

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