Bank of America (BAC) Stock: A Promising Turnaround Opportunity After a 12% Decline
During Wednesday's trading session, the S&P 500 and Nasdaq Composite seemed to take a breather from their recent rally. The broad market index closed 0.38% lower, while the Nasdaq fell by 1.29%. The Dow 30 stocks bucked the trend with a modest gain of 0.27% or 91.74 points. Our robots closed with mixed results yesterday. The banking sector showed strong growth, leading the market. However, technology stocks experienced a correction after a prolonged period of gains. We view this correction as an opportunity to accumulate positions ahead of further growth.
Investors appear to be in a wait-and-see mode, anticipating the upcoming Federal Reserve policy meeting on June 13th and 14th. Economic indicators suggest that inflation is slowly easing, even though it remains above the central bank's target of 2%. For instance, wage growth is slowing down. According to Indeed data, average wages grew by 5.3% year-on-year in May, a 0.4 percentage point decrease compared to April.
According to the CME FedWatch Tool, markets are pricing in a 66% probability that the Fed will keep interest rates unchanged at the next meeting.
Additional economic data will be released on Thursday morning, including weekly jobless claims and wholesale inventories.
BAC stock looks promising for further growth. The RSI Indicator suggests an upward trend with a 62% probability. The Momentum Indicator, MACD, and moving averages also indicate potential upward movement. Recent 3-day advances have historically resulted in continued price growth with a 61% probability.
BAC in upward trend: price expected to rise as it breaks its lower Bollinger Band on September 26, 2023
BAC may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options. In of 35 cases where BAC's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where BAC's RSI Indicator exited the oversold zone, of 34 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 4 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where BAC advanced for three days, in of 317 cases, the price rose further within the following month. The odds of a continued upward trend are .
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on September 21, 2023. You may want to consider selling the stock, shorting the stock, or exploring put options on BAC as a result. In of 80 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for BAC turned negative on September 22, 2023. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 42 similar instances when the indicator turned negative. In of the 42 cases the stock turned lower in the days that followed. This puts the odds of success at .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where BAC declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for BAC entered a downward trend on September 01, 2023. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating fairly steady price growth. BAC’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.859) is normal, around the industry mean (0.990). P/E Ratio (7.918) is within average values for comparable stocks, (17.310). Projected Growth (PEG Ratio) (7.479) is also within normal values, averaging (3.500). BAC has a moderately low Dividend Yield (0.033) as compared to the industry average of (0.056). P/S Ratio (2.237) is also within normal values, averaging (2.452).
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. BAC’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 72, placing this stock worse than average.
Notable companies
Industry description
Market Cap
High and low price notable news
Volume
Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
General Information
a major bank
Industry MajorBanks
BAC and
Correlation & Price change
A.I.dvisor indicates that over the last year, BAC has been closely correlated with WFC. These tickers have moved in lockstep 83% of the time. This A.I.-generated data suggests there is a high statistical probability that if BAC jumps, then WFC could also see price increases.