Placed a risky bet on Bank of America (BAC) today also

Placed a risky bet on BAC today also at $10.92.  Felt comfortable enough to take it due to today’s price actions.  It has been about 11 days now that the stock managed to keep itself above the prior resistance level at $10.25.  The day that BAC broke out was also confirmed with high volume making that now support level a very defined line.  I also bought this stock near the trendline so I felt that the risk is fairly minimal considering the possible upside of this stock.  Plus I think the selling for BAC has already become exhausted from the $15.00 level to now $11.00.  That’s a 27% drop in 9 days.  None the less this is a risky bet as the fundamentals are not in agreement with the technicals.  Exit strategy will be placed at $10.20. 

Plus I believe that most the equity offering has already been done and I believe the preferred to common stock swap details has already been announced today on Bloomberg so all the unknowns should already be known now. Plus I also agree with the recent post that Jim Cramer posts mentioning Douglas Kass along with it that the market can handle the stock supply. 

Addition:

I like what Fast Money traders said about BAC today in their half time report.

I’m seeing risk reversal in BAC, explains Jared Levy. Options investors are selling the downside puts and buying the upside calls. Synthetically it’s like getting long BAC stock at $9.80. It’s a great way to play it.

Bank Of America hit $10.50 a key level, adds Jeff Tomasulo of SMB Capital. That’s bullish.

Source: CNBC Fast Money Half-Time Show