Does Bank of America Support Rising Prices?
With shares of Bank of America (NYSE:BAC) trading around $14, is BAC an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework.
T = Trends for a Stock’s Movement
Bank of America is a financial institution serving individual consumers, small- and middle-market businesses, corporations, and governments with a range of banking, investing, asset management, and other financial and risk management products and services. With its banking and various non-banking subsidiaries throughout the United States and international markets, the company provides a range of banking and non-banking financial services and products through several business segments: consumer and business banking, consumer real estate services, global banking, global markets, global wealth, investment management, and other.
On Wednesday morning, Bank of America reported that net income rose to $2.5 billion in the third quarter of 2013 from $340 million in the year-ago quarter. Earnings per diluted share increased to 20 cents from 0 cents in the third quarter of 2012. ”This quarter, we saw good loan growth, improved credit quality and record deposit balances. Our customers and clients continue to do more business with us,” said Chief Executive Officer Brian Moynihan. “The economy and business climate will improve even more quickly as conditions normalize, and we are well positioned to benefit from that.”
T = Technicals on the Stock Chart Are Strong
Bank of America stock has been flying higher in recent quarters. The stock is currently trading sideways as it digests gains from a recent run, so it may need time to stabilize. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Bank of America is trading above its rising key averages, which signals neutral to bullish price action in the near-term.