Bought Bank of America (BAC) @ $12.94

Bought Bank of America @ 12.94 today after seeing it break yesterday’s key technical of the 200DMA, 50DMA, 20DMA & 10DMA.  On top of that after yesterday’s strong run, it managed to hold above today’s 200DMA @ 12.66 after yesterday’s strong run.  Stop loss placed below the $12.66 level with a short-term target price of $13.83.  Or hopefully the 52-week high @ 15.04. 

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

S&P raises credit raitings for Citigroup ($C) & BofA ($BAC)

• S&P affirmed Citigroup’s rating to A from A-1 in counterparty credit rating and removed it from credit watch
• BofA is also affirmed to A+ from A-1 removing it from credit watch a well.

For both banks S&P said their capital boosting measures will provide them with a cushion even against higher, unexpected losses and both are likely to be able to count on government support (err…). 

Source: MarketWatch

Ken Lewis Speaks about Stress Tests ($BAC)

Just to to keep a record of..

According to Ken Lewis:

• Country wide business is “on fire” in a positive sense and is really booming because of refinancing
• Trading in Merrill Lynch is doing fine, business is good in the investment banking.  Especially through equity offering and debt placements.
• Credit cards are not deteriorating anymore in terms of past dues, but unless unemployment rate decline it is going to be a an issue.
• PPIP: BAC’s bad assets are infact close to fair value and are not considering to sell a lot of it. (Not much incentive for banks to participate on the sell side)

“Common theme amongst investors, get the government out of your business as fast as you can and that will be our first goal” – Ken Lewis

Source: CNBC

Sold Bank of America ($BAC) in the premarket

Sold BAC in the premarket today at $14.80 after acquiring it at $13.87.  After reading an article from marketwatch that they plan to raise 1.25 billion shares at $8.79. 

Really have no trust at all, especially when they said yesterday that they planed to raise it through an ATM program.  Will look into it next week, but for now I am locking in my gains. 

Source: MarketWatch

Bank of America’s ($BAC) plan for the 34 billion

• According to CFO Joe Price, the company will sell $1.25 billion in new common shares.
• Prices will be sold through “ATM program,” where securities are sold through normal stock trading. (NICE!!)
• Overtime, BAC plans to raise $17 billion in common through the conversion of some preferred shares within the $1.25 billion of new issuance.

"We would access the market over time, with the goal of optimizing pricing and timing and price execution," said Joe Price

• BAC also plans on generating $10 billion in gains from the sale of First Republic, Columbia Management, and through a joint venture.
• Price believes that the remaining $7 billion can be satisfied by their actual financial performance over the next six months.
• BAC currently has $32 billion in cash and liquid assets according to their balance sheet.
•  

Source: MarketWatch & Reuters

Finally bought BofA ($BAC) in the aftermarket

Purchased $BAC in the aftermarket today at $13.87 as I am confident now that these financials are going higher tomorrow.  The official stress test came out and the market took it favorably!  Markets are bullish as hell so might as well join ‘em.

 

Resistance is still at $15.13 but looking at the bullishness of the market, I believe it’ll break it easily.   

Update:

Waiting anxiously for entry into Bank of America ($BAC)

BAC current chart pattern is super bullish but it is facing minor resistance along the $15.13 line or if it falls closer to the $12.78 line.  This is one of those stocks that’s so hard for me to make a decision on.  Fundamentals are still very bearish but technicals are telling me a really different story.  I am really taking a lot of risk if I enter here so I think I am going to wait until that resistance level breaks to feel a little more comfortable. 

Bank of America (BAC) at the end of the day

Bank of America finally broke through the yellow $11.30 resistance line with high volume.  Will look for a pull back tomorrow close to the newly formed yellow support line.  Strong resistance is faced on the white $12.78 line.  But Looking at the volume, it looks like BAC can easily break through it.  My next target is the red line which is at the $15.13 level. 

Goldman Sachs upgraded the US Banking Sector to Attractive from neutral.

• The debt rating on the US banking sector was upgraded to attractive from neutral citing that “Supply of non-guaranteed debt is increasing from many of the stronger banking groups”
• Capital one (COF) has also been upgraded to outperform from neutral
• Bank of America (BAC) is upgraded to outperform from neutral

Source: Marketwatch

Bank of America (BAC)

Huge shock with how the market responded with the Bank of America news.  Looks like a good potential target now considering that it has broken through the resistance level at $11.30.  None the less I am still going to wait until tomorrow on Thursday to see if there are any sell offs considering the huge run we have had.  Plus, I also want to wait for the official stress test announcements before I can be confident in putting my money to work. 

Technically, the resistance line has been broken.  Waiting for confirmation of volume by the end of the day for confidence in entering. 

Bank of America (BAC) needs $34 Billion additional capital

This is the main reason why I don’t want to hold financials even though it’s so hard to resists with double digit daily percentage moves.  I only played Financials till Mid April following technical indicators and believed nothing about their fundamentals.  Especially with the change in mark-to-market accounting rules. 

Too much uncertainty rests on these financials companies who got the TARP funds.  Rules keeps on changing everyday, and I am not going to underestimate nor overestimate this stress tests.  Prefer to just not touch it at all. 

Now to the news:

From market watch, unnamed sources report that BAC needs an additional $34 billion dollars according to the results of the stress test. 

That’s 48.9% of its current market cap of $69.39 billion or 300% more than initially expected of $10 billion.  That’s seriously going to result in a huge sell off in the markets if these reports proof to be correct tomorrow.  Futures are already pointing to a drop in the markets tomorrow with S&P pointing to a 1% decline. 

The charts did look interesting as mentioned on my thoughts yesterday.  But looks like this cup and handle pattern may fail. 

Source: MarketWatch

Bank of America (BAC)

A potential cup and handle formation could be forming here for Bank of America.  The formation as of now looks very bullish.  Volume has also been acumulating very nicely in the past month.  Waiting for confirmation with high volume on the breakout above $11.12

BAC is very interesting.  Potential price target $15.13