Investors are caught-up in the Regional Banking fiascoShares in the banking sector have taken a hit amidst Silicon and Signature banking fiasco. In an attempt to recoup investors' confidence, the treasury secretary has ruled out any bailout plans. The fed chairman has also ensured that depositors would have access to their funds. Despite all the efforts, the market seems skeptical, and the regional banking crisis is causing short-term sell-offs across the baking sector.
Bank of America (BAC), the second largest bank in the US with total assets of $3.05 trillion, is down by 5.81%. The trading volume increased to 210.5 million shares, making BAC one of the most actively traded instruments.
BAC stocks have been tumbling for the past week. It's too early to conclude it would be Lehman Brothers circa 2008/2009, said Abrar Bhatti, a Specialist at Exness, BAC indeed seems 'too big to fail.' The depositors may accelerate the shift towards the large banks from the regional ones. The main challenge for the regional banks is if they can compete with the big banks, with their limited liquidity and diversification.
On the technical side, since July 2022, per share price has been consolidating between the $29.50 support and $37.00 resistance area. After the March CPI data, the BAC stocks are trading around the support area of $29.50. Also, the price is trading below 50MA, and the bears could push the market down to the $25.00 support area. In the Monthly charts, a push below the $20.00 support area, which coincides with a 61.8% fib retracement of the wave beginning around January 2012, would expose BAC shares to further losses. That would be one of the indications of a full-blown recession.
On the upside, RSI is already in the oversold territory. If the bears are unable to push the price down on the subsequent attempts, bulls would be looking to break minor resistance of $30.80 and $33.00 in intraday trading.
