For his first Executive Decision segment on Thursday's "Mad Money" program, Jim Cramer sat down with Brian Moynihan, chairman and CEO of Bank of America Corp. (BAC) , which has seen its shares rise 19% in 2019, though it still trades for less than 10x earnings.
Moynihan said Bank of America continues to invest heavily in technology. He said the company's mobile applications do a lot more than just attract younger, millennial consumers; they also appeal to every age group and allow the bank to see significant efficiency gains in its operations.
"Everybody uses our mobile app," Moynihan said.
When asked about the economy, Moynihan said consumer spending continues to drive growth and small and midsize businesses have been the real winners. He said the only segment that's suffering now are the international companies, especially those that sell into China.
Cramer said Bank of America remains a buy, but let's also take a look at what the charts are telling us. (In full disclosure I have been a BAC customer for 20 years.)
In this daily bar chart of BAC, below, we can see a sideways trading range market from February. The year-to-date gains for BAC came in January. Prices are above the 50- and 200-day moving average lines, but both of these indicators have negative slopes. The daily volume pattern shows less and less activity from January and the On-Balance-Volume (OBV) line is back where it was in February as the line has declined from early May. If BAC is going higher, it is not (yet) showing in the volume. The Moving Average Convergence Divergence (MACD) oscillator is barely above the zero line and poised to cross to the downside, telling us there is little strength in the short-term trend.
In this weekly bar chart of BAC, below, we can see that prices are above the flat 40-week moving average line. The weekly volume bars show a decline in trading this year, but the weekly OBV line shows a small improvement. The MACD line is hugging the zero line.
In this Point and Figure chart of BAC, below, we can see a modest upside price target of $33.65 projected. A trade at $31.33 is needed for a better breakout.
Bottom line strategy: The share price of BAC could improve in the weeks ahead, but I find the technical case lacking. You can hold existing longs, but I would suggest a sell stop below $27.50.