Thursday, March 12, 2015

BAC Bank of America Daily Chart Death Cross Sideways Triangle

The banks explode higher today after the stress test results with the exception of one skunk at the garden party; Bank of America. The 50 MA drops under the 200 MA creating a death cross pattern albeit by one penny. Seasoned technicians do not pay much attention to golden crosses (20-day MA up through 200-day MA) or death crosses since price typically reverses once the cross occurs, although in the longer run for the weeks or couple months forward price will typically obey the cross. The golden cross occurs in October to signal bull times ahead and look at how price falls like a stone, however, price recovers and does print a high to begin the year. This is what typically happens.

The death cross occurs now so price may break out up through the sideways triangle and run higher but if the death cross remains in play price would be expected to leak lower again and print a lower price than current price say out in April-June. The red lines show a rising wedge, overbot conditions and neggie d that create the spank down to begin the year. The green lines show the oversold conditions and possie d that create the launch in late January. The blue lines show the sideways nature of the indicators and the sideways symmetrical triangle for price. Note that a major decision will occur for BAC within the next one to three weeks where price should break one way or the other.

Considering the bank orgy today, some of that buoyancy should impact BAC and it did recover off the lows today so a guess would be a move higher to the 16.70 resistance then perhaps a roll over to perhaps print sub 15 out a couple-three months. The chart can be reassessed in a couple weeks or one month from now to see if the death cross is maintained. An alternate scenario is for price to simply leak lower here on out. At any rate the expectation is for a lower price a couple months out from now. 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.

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