Descending Triangle in Bank of America
Bank of America attempted a breakout in October, but some newer patterns suggest a potential change of direction.
Notice the series of lower highs since December 1 as BAC tries to hold roughly $43.60. That’s a potential bearish triangle. Interestingly, the support line is near the June high of $43.49.
Second, most of the candlesticks recently have been solid, meaning that highs have been sold.
Third, price has gotten trapped under the 50-day simple moving average (SMA). The 8-day exponential moving average (EMA) is also under the 21-day EMA.
Next, MACD has been steadily falling since early last month.
Switching to the weekly chart, BAC just formed an inside candle. That kind of compressed price action may suggest volatility is getting ready to expand.
Finally, the macro backdrop may be more difficult for the company because the Federal Reserve’s tighter policy is flattening the yield curve.
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This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
Notice the series of lower highs since December 1 as BAC tries to hold roughly $43.60. That’s a potential bearish triangle. Interestingly, the support line is near the June high of $43.49.
Second, most of the candlesticks recently have been solid, meaning that highs have been sold.
Third, price has gotten trapped under the 50-day simple moving average (SMA). The 8-day exponential moving average (EMA) is also under the 21-day EMA.
Next, MACD has been steadily falling since early last month.
Switching to the weekly chart, BAC just formed an inside candle. That kind of compressed price action may suggest volatility is getting ready to expand.
Finally, the macro backdrop may be more difficult for the company because the Federal Reserve’s tighter policy is flattening the yield curve.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradingView is not affiliated with TradeStation Securities Inc. or its affiliates. TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
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