Bank of America Rallying

Bank of America common shares have been staging a recovery rally in December and are now very near a technical buy point. Have a look at the following chart:

(click on chart to enlarge)

This is a textbook example of technical indicator divergence tipping us off to a change in direction. The share price made a new low just under $11 on November 30, but the MACD and RSI both made higher lows. This would have been a speculative entry point for a short term trade, and if you had bought at the open the following day, you would be sitting on a ~14% gain in 7 trading days as of this writing.

The shares are now above the 50 day SMA. For a longer term position trade, a technical buy point could be set at $12.74, a tick above the November 9 high. We are just under that point now.

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