Big lenders like
BAC
and
JPM
had blistering rallies in October and early November as investors rotated to value stocks and looked for higher interest rates. But now those hopes are fading and BAC is potentially stalling.
Some warning signs may be appearing on the BAC chart. First, its MACD has crossed to the downside. Second, it’s now under its 8-day EMA, which has also flipped negative.
The Stochastic and RSI oscillators have also been dropping from overbought conditions.
It’s possible to make a fundamental argument in favor of the banks because they’re at historically cheap valuations and have gone through lots of stress testing from the Fed. But now lots of good news is priced in and the economic data has weakened. Traders may want to watch BAC’s recent lows around $32.50 as a key level that needs to hold.
BAC
and
JPM
had blistering rallies in October and early November as investors rotated to value stocks and looked for higher interest rates. But now those hopes are fading and BAC is potentially stalling. Some warning signs may be appearing on the BAC chart. First, its MACD has crossed to the downside. Second, it’s now under its 8-day EMA, which has also flipped negative.
The Stochastic and RSI oscillators have also been dropping from overbought conditions.
It’s possible to make a fundamental argument in favor of the banks because they’re at historically cheap valuations and have gone through lots of stress testing from the Fed. But now lots of good news is priced in and the economic data has weakened. Traders may want to watch BAC’s recent lows around $32.50 as a key level that needs to hold.