BANK OF AMERICA One last low and off to a great 2024?The Bank of America Corporation (BAC) got rejected again on its 1W MA50 (blue trend-line), a level that has been acting as a Resistance since the March 2022 break-down. This has created a Lower Highs trend-line that is the key pivot level now. But before that, let's see how it's been trading on a +10 year basis.
As you see on this chart, ever since the November 2011 Low, the stock has been trading within a Fibonacci Channel, with the extensions serving as very accurate Resistance and Support levels. We have seen 1W MA50 rejections after strong corrections in April 2016 and June 2020. Each of those times, the price hit the Buy Zone (green) before rebounding to a Higher High, while the RSI on the 1M time-frame hit the 38.80 Support. The 1M MA200 (red trend-line), which has been the multi-decade Support since the late 1980s and only broke during the 2009 Housing Crisis, is exactly at the bottom (0.0) of the Fibonacci Channel and will serve as the last Support standing between a recovery and possible oblivion.
As a result, BAC is within the Buy Zone that makes it a 4 year buy opportunity, with the most optimal level being just lower, ideally when the 1M RSI hits the 38.80 Support and rebounds. However it will only get confirmed when it closes a 1W candle above the Lower Highs trend-line. As far as a long-term target is concerned, the first Higher High on the Fibonacci scale was made on Fib 2.0 (March 2014), the second on Fib 4.0 (March 2018) and the third on Fib 6.0 (January 2022). Investors could hold, based on this sequence, until the 8.0 Fibonacci extension but on a lesser long-term horizon, we aim at $44.00.
It is interesting to point out that while each Cycle within this Channel has approximately been 4 years and each of the rallies around 2 years, like the one we're expecting now. The Sine Waves are the perfect tool to display that.
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