Trade of the Day: BAC Stock Could Return 30% by Year End

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Bank of America Corp (BAC) This is the second largest U.S.-based financial holding company with more than $2 trillion in global assets.

Capital IQ recently raised its 12-month price target on BAC stock by $1 to $20, maintaining a “buy” rating on shares. Its analysts were encouraged by the shakeup of the bank’s management team.

Following a meeting with Bank of America’s new CEO and CFO, Credit Suisse Equity Research said it believes the bank can grow revenues, become more efficient and increase shareholder returns. Its analysts have an “outperform” rating on BAC stock.

Eleven analysts have upped their full-year earnings estimate over the past month, according to Zacks, with the consensus rising from $1.35 per share 30 days ago to $1.43 currently.

The financial industry should be helped by an increase in interest rates by the Federal Reserve, which most analysts believe will occur before year end.

Technically BAC stock has been in a consolidation since it jumped from about $10 in December 2012 to a triple-top high at just over $18 (first top not shown). In the past two months, volume has picked up sharply and the MACD indicator popped into the bullish zone, both strong bullish indicators.

However, the heavy buying opened a trading gap from $17.15 to $17.49, and gaps of this type are usually closed. Therefore, try to buy BAC stock under $17 with a price objective of $22 before year end. If successful, traders could achieve a return of almost 30% in five months.

BAC Stock Chart
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Article printed from InvestorPlace Media, https://investorplace.com/2015/07/bank-of-america-corp-bac-stock-trade-of-the-day/.

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