close icon

Bank of America Slides Despite Record Quarter

Bank of America reported its Q3 results on Monday. To say that the mega bank’s performance was good would be an understatement. Record net income of $7.2 billion translated into EPS of $0.66, 11% return on equity and 1.23% return on assets. The latter is a pretty solid result for a bank with $2.34 trillion in assets.

Unfortunately for Bank of America shareholders, the company’s stellar business performance failed to lift the stock price. In fact, BAC fell to $27.64 per share shortly after the Q3 report was made public. Given that we have been bullish for quite a while now, it’s worth hearing what the Elliott Wave Principle has to say now.
Bank of America stock Elliott wave analysis
The 2-hour chart of bank of America stock reveals the structure of the entire decline from $33.05 in March. It looks like a simple A-B-C zigzag correction is in progress. The truth is the stock’s slide could have ended much earlier, but the market decided to draw an expanding triangle in the position of wave B.

Instead of ending at $27.63 in July as suggested in our previous update, wave C is still unfolding. It should eventually evolve into a complete five-wave impulse, meaning lower levels can be expected, before the bulls return. A series of fourth and fifth waves in wave C should first develop.

Bank of America’s future remains bright as business performance is what matters in the long-term. In the short run, however, BAC may slide to $26 – $25 a share, before the situation starts to improve.

Did you like this analysis? Our Elliott Wave Video Course can teach you how to uncover similar opportunities yourself!

Disclosure: The author holds a long position in Bank of America stock.



Stay informed with our newsletter

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

Privacy policy
You may also like:

Nordstrom Crashed. Was EPS Miss the Real Reason?

Nordstrom shareholders were enjoying a smooth ride so far in 2018. The stock was up by as much as 38.8% by the end of October, crushing the return of the S&P 500 by a large margin. November, on the other hand, is not that generous. JWN fell from $67.75 to less than $50 a share…

Read More »

LEG Stock Lost 38% in Two Years. Time to Buy?

Less than two years ago, in February 2017, the price of Leggett & Platt shares was hovering above $49 a share. LEG stock was still thought to be in an uptrend, following a steady rally from $10.03 in March 2009. However, stocks get more risky as they rise, not less. Following a 400% rally in…

Read More »

3M Stock: Another Elliott Wave Reason for Skepticism

2018 has not been very kind to 3M stock investors. The share price was hovering in the vicinity of $260 in January. Fast-forward to October 26th , it was down to $181.98 for a 30% plunge in just ten months. Now let’s take a look at the 4-hour chart of 3M stock, which we shared…

Read More »

PayPal Stock Entering High-Risk Territory

PayPal Holdings Inc. was spun off from eBay in 2015 and, judging from its share price three years later, it has been a tremendous investment. PayPal stock fell to $30 a share in August 2015. By September 2018, it was trading above the $93 mark. Following last month’s dip to $74.66, the stock is on…

Read More »

MCD Stock is a Bull Trap at New All-Time Highs

Less than two months ago, on September 19th, the stock price of the biggest fast food chain in the world was hovering below $158 a share. MCD stock had spent most of 2018 moving sideways without making any meaningful progress. The good news was that in the meantime it had formed a textbook triangle correction,…

Read More »

AMD Stock Confirms Bearish Reversal

A month and a half ago, on September 11th, AMD stock was hovering around $30 a share following a spectacular 190% rally in 2018. Optimism was running high, but knowing that semiconductors is an extremely cyclical industry, we thought it was time to “be careful”. Of course, the stock did not start declining immediately after…

Read More »

Boeing Getting More Risky as it Rises, Not Less

Of course, all stocks are riskier at a higher price, but after Boeing ‘s phenomenal performance in the last two years, it is very easy to forget that it can actually go down, as well. It is a risk which must never be neglected. BA just climbed to a new all-time high and the last…

Read More »

More analyses