Bernie Schaeffer
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Is Bank of America Poised for Another Leg Lower?

Posted By: Bernie Schaeffer 07/06/2012

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BAC Backs Down from Its Key 320-Day Moving Average
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Trader Comments

Todd Salamone:

The shorter-term 80-day moving average is in the vicinity of the 320-day moving average and marked a short-term top on 6/20 and again earlier this week.  Also, we saw strong interest in the 8-strike calls yesterday that expire on 7/13.  These bullish bets might be viewed as a sell signal to contrarians.  Finally, rallies lately have been stopped at BAC's 50% YTD return in the $8.34 area.

Bryan Sapp:

In the front three months of option open interest, calls outnumber puts by a ratio of 1.7:1. Despite ongoing weakness by this name, traders continue to step in and attempt to pick a bottom.  Until this sentiment backdrop shifts, I see no reason for the current downtrend to reverse.

Ryan Detrick:

XLF just ran into trouble near its 80-day moving average.  Also looks like it just completed a bearish island reversal with this morning's gap lower.  Ugly picture if you are bullish financials here.

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