Long Term Bank of America (Ticker: BAC) Stock Chart Analysis:

The following Bank of America Stock Analysis that follows is the first part of a series of steps that you can find outlined in the Stock Analysis section of this website.

When conducting stock research it’s always best to pull up the stock chart and get a feel for historical price action and find out where price has been to better determine where it will be headed in the future as well as be able to identify significant support and resistance levels.

By doing this, you can better identify where to enter and exit profitable trades in the stock market.

To get started let’s look at the 10 year chart of Bank of America (Ticker: BAC)

Bank of America 10 Year Stock Chart

As you can see over the past 10 years Bank of America has traded in prices from a low of $2.51 (ouch!) to a high of $47.84. Let’s dig a little deeper and start looking at the longer term trends of stock price associated with this chart.

Long Term Trend Bank of America Stock Analysis

The first step in breaking down the chart analysis of Bank of America is to look at things from a Technical Analysis perspective and start painting of picture of historical price movements in the form of upward, downward, or sideways trends.

Bank of America Long Term Price Trends

So, for the first five or so years of this chart you can see that Bank of America Stock Price was on a steady upward trend (green arrow). This of course came to a screeching halt in the latter half of 2007 in what turned out to be the great housing/banking crisis.

From this point forward, save the quick V Bottom formation, the price has been in a long term downtrend as indicated by the red arrow in the picture above.

Bank of America Long Term Stock Chart Support and Resistance Levels

The next step after identifying the long term chart trends of Bank of America is to now go in and mark the chart with significant areas of support and resistance as shown below.

Long Term Support and Resistance Levels

As you can see from above, marked in purple, are significant long term areas of horizontal and diagonal support and resistance.

There are three horizontal areas shown in the picture. The top level marks the highs of the previous 1o years, the middle line represents where the rally off of the V Bottom hit significant resistance and resumed the previous downtrend, and the bottom line represents the lows of the panic selling during the housing crisis.

There is one downward trending diagonal line which has been significant resistance to upward price movement over the past several years.

These are all significant areas of potential support and resistance to be noted in future price movements.

However, when looking at this chart in relation to where price is currently the two most significant levels are the bottom support level and the down trending resistance line.

The reason these are most significant currently is simply due to the fact that current price action is either directly above or below either of them and therefore most important to consider if you are doing conducting Bank of America Stock Analysis with the intention of setting up a profitable trade.

 Intermediate Term Bank of America Stock Analysis:

Now let’s move a step closer and look at a two year stock chart to conduct our intermediate term stock price analysis.

Intermediate Term Trend Bank of America Stock Analysis

Bank of America 2 Year Stock Price Trend Analysis

Looking at the chart above it should be pretty obvious which direction Bank of America (Ticker: BAC) has been headed.

Can you say “Look Out Below…”

Short of a small sideways trend at the start of the chart, price has been in a steady downward trend over the last 20 months or so.

So what does this tell us as traders?

Well, if you are a Technical Trader then you should know the mantra of “The Trend Is Your Friend.” So after looking at this chart, if you are planning to trade this chart in the direction of the trend then you will need to know how to profit from stock price moving lower with options (please don’t short stock!!!).

If you are the type of trader that thinks Bank of America has to turn around because it has “just gone too low” then that my friend is what’s known as “Bottom Picking” and there are shrines of you put up in every hedge fund and portfolio manager’s office thanking you for your contribution (or, you are riding around in your newly minted $20 million yacht proudly named “Bottom Picker”).

Sorry for the rant, now back to the BAC Stock Analysis…

Bank of America Intermediate Term Stock Chart Support and Resistance Levels

Intermediate Term Support and Resistance Levels

The picture above is a 2 year stock chart of Bank of America displaying several horizontal and diagonal support and resistance lines.

As you remember from above we marked the long term lines with purple and at this point I have market the intermediate term lines with the teal color you can see above.

When looking at this chart I hope you see what I do which is a LOT of overhead resistance (both long term and short term).

One of the significant things I see on the chart is that if you take the downward sloping long term resistance line (purple) and the intermediate term downward resistance (teal) they form what looks like a nice channel. However, price broke below the bottom of this downward sloping channel which is even more of bearish signal indicating that even the bottom of the channel couldn’t hold as support for stock price.

I hope by now after reading through this Bank of America Stock Analysis you can see the importance of starting long term and moving to shorter time frames BEFORE moving to the hard right edge of the chart to make trading decisions. I encourage you to learn more about Technical Analysis and how it can improve your trading by signing up for the Free Technical Analysis Course at the top right of this page.