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- 1 BAC stock price is experiencing a bullish trend after the Fed stopped rake hiking.
- 2 The banking sector can make a comeback with increased NIMs.
- 3 The current patterns in the BAC stock chart are showing a sideways trend ahead.
North Carolina-based bank, Bank of America Corp. (NYSE: BAC) is one of the big names in the game. The company facilitates the provision of banking and nonbank financial services.
As a result of the banking sector struggling recently, majorly due to the collapse of Silicon Valley Bank and several others in this fiscal year, the Financial Select SPDR exchange-traded fund, XLF is down 4.9%, while the SPDR S&P Regional Banking ETF KRE has experienced a significant drop of 33% in 2023. Moreover, one of the major indices, the KBW Nasdaq Bank Index BKX is further down by 27%.
Fed Interest Rates and Banks
During this year, several banks’ Net Interest Margins (NIMs) have been under pressure due to competition from deposits and narrower profit margins on loans. Nonetheless, on a new Friday, the Central bank halted the climb of the loan fees. This can essentially affect the acquiring costs for banks.
Furthermore, the experts predict that the rates will be still for some time which will reduce the cost of borrowing for the banks. This will make it more alluring for banks and other monetary institutions like asset management firms to get cash. This will prompt an expansion in the retail and business credit book of banks which will additionally build NIMs and profitability of banks.
Technical Analysis and Prediction of the BAC Stock Price
The BAC stock price has been falling since the end of July when the bulls made a high of $32.8, after which the bears took control, pushing the stock into a bearish rally. At the start of November, the BAC stock price broke its downtrend and witnessed an 8.6% increase in just three days. However, it has been unable to surpass the resistance offered by a 150-day EMA at a level of $28.9.
The immediate resistance from the current trading price is at $30.2, while the bulls can rely on the support level of $27.9. Moreover, the RSI stands at 63, slightly above its neutral level of 50. Meanwhile, the simple moving average line (SMA) of the RSI is at the level of 43 after making a bullish crossover during the surge. The prediction is sideways for a few trading sessions before the bulls can attempt to break the resistance.
Conclusion
Bank of America Corp. (NYSE: BAC) has faced some struggles in its financial books due to the banking sector fall this year. The Fed has stopped raising interest rates which can benefit the US banks altogether. Currently, BAC stock price has broken a downtrend and is on the rise.
Technical Levels
- Support Levels: $27 and $25
- Resistance Levels: $30 and $32
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading in stocks or related indexes comes with a risk of financial loss.
Mr. Pratik chadhokar is an Indian Forex, Cryptocurrencies and Financial Market Advisor and analyst with a background in IT and Financial market Strategist. He specialises in market strategies and technical analysis and has spent over a year as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the Financial markets.
