The Steady Trader’s Head of Investment Strategy Serge Berger posted, on Thursday, a video in his YouTube channel explaining why he bought shares of Bank of America Corp BAC this week.
The banks as a group –- see KBW Bank Index BKX, in blue -- “have shown relative strength all year versus the broader stock market” -- see the S&P 500 INDEX SPX, in black -- and “continue to be supported by a slowly rising interest rate environment,” he says.
Source: Serge Berger.
Bank of America, in particular, “has shown good relative and absolute strength within this strong group and looks poised to rally more in coming weeks.”
As it can be seen in the weekly chart above, the stock has been stuck in a range over the past year and a half or so. Although the shares are now somewhere near the upper end of this range, Berger sees room for growth.
Now, looking at Bank of America in relative terms, compared with the KBW Bank Index (in black, this time), the stock is also outperforming its peers, which are, in average, performing strongly as well.
Finally, looking at the daily chart, the stock looks supported and, according to Berger, it might be able to move towards the $17.50-$18 area.
Shares of Bank of America are up about 2.4 percent on Friday, trading at $17.18.
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