Warren Buffett Sells More Bank Of America Stock: Should You Follow His Lead Or Invest Further?

Warren Buffett's Berkshire Hathaway Inc BRK BRK has been steadily trimming its stake in Bank of America Corp BAC, selling off $7.2 billion worth of shares since mid-July.

Warren Buffet Has Been Trimming Stake In BAC

Following the sale of 5.8 million shares for $228.7 million at an average price of $39.45 on Friday, Monday and Tuesday, Berkshire Hathaway's stake in Bank of America has decreased to approximately 11% of the company's total shares. Despite this reduction, Berkshire remains BAC's largest shareholder and trails behind Apple Inc AAPL and American Express Co AXP in Berkshire’s top holdings.

Despite this aggressive selling spree, which has stretched over 12 consecutive sessions, Bank of America stock has only dipped about 1% since July. Year-to-date, however, the stock has gained 16.7%, slightly outperforming the S&P 500.

While some investors may see Buffett's move as a red flag, others might interpret the pullback as a buying opportunity. After all, Bank of America's fundamentals remain strong, and CEO Brian Moynihan seems unbothered by the Oracle of Omaha's recent sales.

At a recent conference, Moynihan reiterated his admiration for Buffett's savvy 2011 investment, which helped shore up the bank during a time of crisis.

"He's been a great investor for our company and stabilized it when we needed it," Moynihan said.

Read Also: Bank Of America CEO On Buffett’s Share Retreat: ‘I Don’t Know What Exactly He Is Doing … We Can’t Ask’

Technicals: Bearish Now, Bullish Signs Emerging?

Currently, Bank of America's technicals are flashing mixed signals. The stock is trading at $39.06, below its five-day, 20-day and 50-day moving averages, signaling a bearish short-term outlook.

Chart created using Benzinga Pro

Specifically, the eight-day and the 20-day SMAs at $39.58, point to more potential selling pressure. The stock trading below the 50-day SMA of $40.18 further indicates medium-term bearishness.

Chart created using Benzinga Pro

Meanwhile, the MACD at a negative 0.10 indicates bearish momentum, and the RSI of 45.08 suggests that BAC stock is neither overbought nor oversold.

However, long-term investors might see a glimmer of hope. With the stock price still above its 200-day moving average of $36.82, there’s a bullish case to be made for a potential rebound.

As Buffett continues to reduce his stake, the key question remains: Is Bank of America still a “great investment” stock, or is it time to move on?

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Image created using artificial intelligence via Midjourney.