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:

Yum! Stock to Form a Base Near $75 a Share

The coronavirus selloff hit the restaurant industry hard. With stores closing to prevent the virus from spreading, the stocks of McDonald’s, Starbucks, Dunkin and the like all came crashing down. Yum! Brands wasn’t spared either. YUM stock has been losing ground since the summer of 2019, but it was the COVID-19 crisis that really scared…

Read More »

Intel ‘s Troubles Fit in its Elliott Wave Correction

2020 is shaping up as a year to forget for Intel shareholders. The stock is down over 20% year-to-date. First, the coronavirus selloff caused a 35% plunge down to less than $44 a share. And just when it seemed INTC was recovering, the company announced it will delay its 7nm products until late 2022 or…

Read More »

Expedia Stock can Surge as Travel Returns

The coronavirus pandemic hit no other sector harder than travel. Lockdowns took a heavy toll on airlines, hotels and even rental car services as people postponed vacations and business trips were cancelled. Even asset-light companies like Booking and Expedia saw their stock prices plunging. Expedia, which was down 25% from its all-time high even before…

Read More »

Plus500 Confirms Uptrend, but Correction is Likely

Based in Haifa, Israel, Plus500 (LSE:PLUS) operates a leading CFD trading platform. The company is part of the FTSE 250 index and conducts most of its business in Europe and Australia. The new ESMA regulations which came in effect in August 2018 severely impacted the CFD trading industry. As a result, Plus500 stock fell from…

Read More »

Moody’s, a Buffett Darling, Trading in Late Fifth Wave

Moody’s Corp. has been a long-time holding in the Berkshire Hathaway portfolio. It is also the seventh biggest position in it as of the end of March 2020. The company has a strong competitive advantage, it is highly profitable and growing. No wonder Warren Buffett likes it so much. The stock did decline sharply in…

Read More »

Dollar General Stock Bulls are Looking for Trouble

As a general merchandise discount retailer, Dollar General was among the handful of businesses that actually benefited from the pandemic. People piled on necessities preparing for what looked like the end of the world for a while. As a result, sales at Dollar General surged in the midst of the crisis. While its stock price…

Read More »

Veeva Systems Stock Trades in Bubble Territory

It is true that the Fed’s recently re-adopted zero rate policy and stimulus are distorting financial markets. Interest rates are like gravity to financial assets. The lower the rate, the higher asset prices go and vice versa. As a result, stocks in general tend to ignore the economic reality right now. Among the companies trading…

Read More »

More analyses