What's Next For Bank Of America As Stock Breaks Below Support?

Bank of America Corp. BAC shares are trading lower Wednesday after the company reported worse-than-expected second-quarter sales results.

For the previous quarter, the company reported sales of $21.50 billion, missing the estimate of $21.83 billion. Earnings of $1.03 per share beat the 77-cent estimate.

Bank Of America's stock was down 2.9% at $38.68 at last check.

See Also: How To Buy & Sell BAC Stock

Bank Of America Daily Chart Analysis

• Shares have been trading in an upwards channel for a long time, but recently looked to have broken below the support.
• The stock is trading below the 50-day moving average (green), but above the 200-day moving average (blue), indicating the stock is likely facing a period of consolidation.
• The 50-day moving average may act as an area of resistance while the 200-day moving average may hold as an area of support.

Key Bank Of America Levels To Watch

• After falling and breaking below support, it's possible the stock could see a strong correction in the coming weeks.
• The Relative Strength Index (RSI) started falling and now nears the oversold area. The RSI sits at 37 now and the oversold area starts at 30 and goes to 0.

What’s Next For Bank Of America?

Bullish traders would like to see the stock bounce and start heading back up. Bulls want to see the stock move back into the upwards trending channel and resume trading within the channel. Bulls would also like to see the stock cross above the 50-day moving average.

Bearish traders would like to see the stock continue to stay below the channel. If the stock can stay below the channel, it may be ready to see a further bearish push. Bears would like to see the stock cross below both moving averages for sentiment in the stock to turn bearish.

Photo: Mike Mozart, Flickr