Technical Analysis – Bank of America stock stands within a bearish correction; “death cross” is expected
July 16, 2018 2:26 pm
Bank of America stock price has been holding within a bearish correction mode as it found a strong resistance obstacle on the 33.00 handle in mid-March. A “death cross” is in progress as the 50-day simple moving average (SMA) falls below the 200-day SMA to indicate that lower prices lie ahead.
From the technical point of view, the RSI and the stochastics have both weakened, with the former dropping below its neutral threshold of 50 and the latter easing below the overbought territory after the %K line recorded a bearish crossover with the %D line.
Should the price continue to drift lower, traders could look for support at the 27.70 trough, where bears could push hard to extend the negative momentum. In this case, the stock could slip below this level to test the 27.00 psychological level, where the price topped during November 2017.
Alternatively, should the price head north, it would be interesting to see whether the downtrend line can stop any advances. The price first needs to touch the 29.20 resistance and then the diagonal line would be acting as a significant obstacle for the bulls. A jump above this area would open the door for the 30.40 hurdle and shift the bearish bias to bullish.
Regarding the medium-term picture, the market is expected to remain bearish as long as the downward pattern off 33.00 remains in place and a “death cross” is formed as expected.
Bank of America stock price has been holding within a bearish correction mode as it found a strong resistance obstacle on the 33.00 handle in mid-March. A “death cross” is in progress as the 50-day simple moving average (SMA) falls below the 200-day SMA to indicate that lower prices lie ahead.
From the technical point of view, the RSI and the stochastics have both weakened, with the former dropping below its neutral threshold of 50 and the latter easing below the overbought territory after the %K line recorded a bearish crossover with the %D line.
Should the price continue to drift lower, traders could look for support at the 27.70 trough, where bears could push hard to extend the negative momentum. In this case, the stock could slip below this level to test the 27.00 psychological level, where the price topped during November 2017.
Alternatively, should the price head north, it would be interesting to see whether the downtrend line can stop any advances. The price first needs to touch the 29.20 resistance and then the diagonal line would be acting as a significant obstacle for the bulls. A jump above this area would open the door for the 30.40 hurdle and shift the bearish bias to bullish.
Regarding the medium-term picture, the market is expected to remain bearish as long as the downward pattern off 33.00 remains in place and a “death cross” is formed as expected.
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