I see there is a report out that “Anonymous,” a hacker group affiliated with WIkiLeaks, plans to release a slew of emails obtained from inside Bank of America. While I am happy to see that Julian Assange and his fellow wannabe cool kids have moved on from Dungeons & Dragons to the real world, I have to wonder how scandalous it is to presumably find out that a bunch of scumbags and shady cats work on Wall Street.
Rather than get caught up in “trading the news,” which I see is the chic thing to do these days, I will stay within the context of my philosophy and analyze the overall price action.
Looking at a daily chart of BAC, zoomed out, we have a serious attempt at a major bearish to bullish reversal (dating back to the correction that began in April, 2010). Over the past two months, after a sharp rally since December, the chart has settled into a textbook symmetrical triangle, with higher lows, but lower highs (pink lines). Note that this pattern can also be interpreted as a bull flag, or bullish continuation pattern of the rally from December. Note also the longer-term moving averages starting to smooth out, not to mention the 50 day turning up.
Either way, unless we see a high volume selling affair over the next few days that completely obliterates this setup, I would be looking for serious support buys in most of the major financials, including BAC.
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I hear anonymous is also targeting the Federal Reserve. Could be interesting….
I agree a close above $14.70 sets it up for a huge 3 month rally. It’s a little crazy my technical target $20.75 before June 2011. If it opens lower tomorrow, I think it marks the end of this triangle and you buy the April or May 15 calls. In fact I wouldn’t be surprised to see the Mar 15 calls close in the money on Friday.
The only thing I don’t particularly like about this trade, is that financials were pumped all winter as the trade of the year by so much of the press. Also, what happens when POMO ends in June? Might be taking too long of a view here tho