Bank of America's Charts Remain Bearish, Despite Earnings Beat

Let's take a closer look.

Bank of America (BAC) reported its first-quarter numbers Monday morning. Earnings and revenue figures beat analyst expectations and the stock is trading higher in early turnover but the charts and indicators remain bearish.

Let's take a closer look.

In the daily bar chart of BAC, below, we can see that the shares have been bouncing off a "neckline" around $38 for the past 12 months. BAC broke under the cresting 200-day moving average line in late February/early March and then rebounded to the underside of the average line in late March. BAC turned lower and made a new low for the move down. The 50-day average is moving below the 200-day line for what is commonly called a bearish dead or death cross sell signal.

The On-Balance-Volume (OBV) line has been weak all calendar year so far and tells us that sellers of BAC are being more aggressive than buyers. The Moving Average Convergence Divergence (MACD) oscillator is in a bearish alignment below the zero line.

 

In the weekly Japanese candlestick chart of BAC, below, we see a bearish setup with prices and the indicators. BAC is in a downtrend as it trades below the declining 40-week moving average line.

 

The weekly OBV line is pointed lower and the MACD oscillator is bearish.

 

 

In this daily Point and Figure chart of BAC, below, we can see a price target of $34.

 

 

 

 

In this weekly Point and Figure chart of BAC, below, the software is projecting a potential price objective in the $27 area.

 

 

 

Bottom-line strategy: The charts of BAC still look bearish but an earnings beat may give some traders pause. Continue to avoid the long side of BAC.

 

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