December 9, 2010 | In: Financial

BAC Broke Through 2 Resistances

BAC continued its rebound today, up 65 cents (or 5.42%) from yesterday’s closing. BAC reached a high of $12.69. What’s interesting today is that BAC broke through 2 resistances, the $12.06 resistance (tested 6 times) and the $12.36 resistance (tested 3 times). If the stock closes above the $13 level tomorrow (which can easily happen if the stock breaks $12.91 resistance – tested 7 times), then we will hopefully see a major buying spree in the next couple of weeks. BAC is an extremely undervalued stock, the real stock price should be at least double the current price. If you have any doubts, look at its short ratio, it’s a ridiculous 0.4%, which means that investors are shorting it just to protect their long positions, and not because they think it’s gonna go down.

I believe that next year will be the year where all the financials will rebound. You can already see this in BAC, C, JPM, and MS. All the bad news are already cooked into these stocks, and all of them are way undervalued, so there’s little room for them to go down.

To whoever held his financial stocks through the (mostly) bad days in the second half of 2009, I like to say the following: “Patience is a virtue” and “Patience pays off”.

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