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Bank of America: A Smart Buy at Current Levels

By Satendra SinghStock MarketsDec 17, 2024 17:56

ph.investing.com/analysis/%D0%9E%D0%B4%D0%BD%D0%B0-%D1%81%D0%BD%D0%B5%D0%B6%D0%B8%D0%BD%D0%BA%D0%B0---%D0%B5%D1%89%D0%B5-%D0%BD%D0%B5-%D1%81%D0%BD%D0%B5%D0%B3-207376

By Satendra Singh | Dec 17, 2024 17:56

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BRKa

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Once considered an overvalued stock, could BAC look ready to return as an investing jewel in 2025 while the market is full of overpriced darlings? What makes it the best investment option for the longer term?

Tuesday's announcement on the declaration of dividends by the Bank of America Corp (NYSE:BAC) (BAC) turned my focus to analyzing the levels to invest.

• Despite Berkshire Hathaway (NYSE:BRKa) selling a major chunk of BAC’s shares, it still maintains a place in their portfolio.
• A correction in BAC’s share price could provide investors with an opportunity to buy at the levels I discussed in this analysis in February 2025.
• Donald Trump’s entry on January 20, 2025, could shake the markets in the short term, while the longer-term focus looks sound.
• The dividend yield announcement compels investors to uncover this hidden gem.

Click the link to check the dividend, announced by Bank of America on December 16, 2024, for the first quarter of 2025.

https://newsroom.bankofamerica.com/content/newsroom/press-releases/2024/12/bank-of-america-declares-preferred-stock-dividends-for-first-qua.html

What do the Technical formations say?
Bank of America (BAC) Daily Chart

In the daily chart, BAC’s share price slide is likely to continue due to the formation of a bearish crossover on December 11, 2024, and the BAC's share is trading below the 9 Days Moving Average.

Undoubtedly a breakdown below the immediate support at the 50 Days Moving Average at $46 could generate a steep fall in share prices to test the next significant support at the 100 Days Moving Average at $41.86.

Despite a majority of the analysts being bullish on the price move the current geo-political scenario could extend wobbling at this level as the technical formations indicate bearishness to continue till the joining of the US President on January 20, 2025.

In case of a sharp slide, the share price could test a major support at the 200 Days Moving Average at $40.21 which could be the best level for a stable investment.

Resistance Levels to watch

I have pointed out some important support levels. But on the opposite side, some reversal could be seen in the short term due to the entry of some Funds that made an exit in the last quarter of 2024.

Immediate resistance is at the 9 Days Moving Average at $46.12 and the next significant resistance will be at the 20 Days Moving Average at $46.60.

Undoubtedly, any sharp upward move by the share price will provide an opportunity to short at the recent peak levels near $48.

Finally, I conclude that investors must adopt and watch policy as the wobbly moves could shake the whole equity market which is teetering at a crucial point right now amid growing assumptions on joining Donald Trump who favors high interest rates.

I find that Bank of America (BAC) could be a good pick in case of any sharp move that could take the share price to test $35 in January 2025.

Disclaimer: Readers are requested to take any position at their own risk as this analysis is purely based upon the observations.

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Bank of America: A Smart Buy at Current Levels

What do the Technical formations say? Bank of America (BAC) Daily Chart

Resistance Levels to watch

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What do the Technical formations say?
Bank of America (BAC) Daily Chart