close icon

Bank of America Twenty Months Later

Bank of America Corp. stock closed at 14.42 yesterday. In 2015, the stock suffered a sell-off from as high as 18.42 dollars a share down to 10.94 by February, 2016. Could this slump be expected and is the current recovery going to continue?

On January 8th, 2015, nearly twenty months ago, we published “Bank of America Set to Extend Decline” to prepare investors for the upcoming weakness. “It does not look like a stock to invest in right now” was the last sentence in that article. The chart and analysis this conclusion was based on is given below.
bank of america 8.1.15
Except for this chart, we did not need anything else to form our bearish opinion on Bank of America stock. First of all, the Elliott Wave Principle suggested it was trading near the end of the final phase of a five-wave impulse. According to the theory, every impulse is followed by a three-wave correction in the opposite direction. In addition, the relative strength index was showing the typical bearish divergence between the last two motive waves within the sequence – 3 and 5. As the update chart below proves, technical analysis serves us not only in the short term.
bank of america 4.8.16
A little relabeling was needed, because wave 4 extended into a running flat, but it is true that Bank of America was definitely not a “buy” twenty months ago, in January, 2015. A year later, it had already lost about 40% of its value. Most people claim that technical analysis is useful only for short-term forecasts, while long-term developments depend entirely on fundamental factors. The Wave principle proved that when it comes to Bank of America, that is not the case.

Now, the 50% Fibonacci level seems to have stopped the bears in their tracks for now. Besides, the 5-3 wave cycle is pointing higher. If this is the correct count, Bank of America stock could be expected to climb above 18.42 from now on, since wave (C) is supposed to exceed the top of wave (A). 10.94 seems to be out of danger, at least for now.

Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

Privacy policy
You may also like:

PNC Financial – Elliott Wave Analysis Works Yet Again

Earnings at PNC Financial suffered last year along with the entire financial sector. Net income before extraordinary items came in at $2.95B in 2020, down from $5.35 in 2019 for a 45% reduction. In our opinion, amid the biggest crisis since the Great Depression, the fact that PNC and its peers even managed to stay…

Read More »

Betting on 3i Stock a Year Ago Pays Off in Spades

The first time we wrote about 3i Group was in late-October 2019. The stock was hovering around 1100 pence a share following a 1000% gain in the past ten years. Needless to say, few thought a major decline was even possible. Fortunately, Elliott Wave analysis helped us see the bulls cannot be trusted. Five months…

Read More »

Ahead of Hibbett ‘s Unlikely Surge to New Records

Hibbett Sports Inc. is an American sporting goods retailer with more than 1000 stores in over 30 states. We first wrote about the company in the summer of 2017. The stock was trading below $16 a share back then, following a decline from as high as $68.31 in late-2013. At first glance Hibbett looked like…

Read More »

Walgreens Stock Confirms Downtrend is Over

Walgreens stock had been declining for over five years between 2015 and 2020. One of the largest pharmaceutical retailers in the world reached an all-time high of $97.30 in August 2015. In late-October 2020, it fell to $33.36, losing almost 66% from the record. It must have been difficult for Walgreens investors to keep a…

Read More »

Interpublic on the Verge of Doubling Amid Pandemic

We first wrote about Interpublic in March 2018. The stock had just reached $26 a share, but we thought an Elliott Wave correction can “easily erase about 50% of Interpublic ’s market capitalization.” Two years later, during the coronavirus panic in March 2020, IPG fell to $11.63, down 55% from the 2018 high. Fortunately, the…

Read More »

Expedia Acts As If Travel Restrictions Do Not Exist

We last wrote about Expedia in mid-2020. Countries around the globe had mostly closed their borders, the COVID-19 vaccine was still just a hopeful prospect and the summer travel season was practically ruined. No wonder the stock of Expedia, one of the largest travel booking companies, was down 46% from its 2017 high. Yet, during…

Read More »

The Trade Desk to Exceed $1000, but Not by Much

The first time we wrote about The Trade Desk was in May 2019. The stock was trading above $220 a share and we thought a notable correction can soon be expected. That call was rather premature though, since the bulls added another $100 before giving up. However, by March 2020, TTD was down to $136,…

Read More »

More analyses