Is Bank of America Closing in to Resistance?

Published on Thursday, 09 August 2012 08:20 Written by TradersHuddle Wire

New York, August 9th (TradersHuddle.com) - Shares of Bank of America Corporation (NYSE:BAC) are trading very close to calculated resistance at $7.85. The stock ended the trading session at just $7.67, which is near levels that make it difficult to buy or start a position.

Bank of America Corporation (NYSE:BAC) offers banking, investing, asset management, and other financial and risk-management products and services. The Company has a mortgage lending subsidiary, and an investment banking and securities brokerage subsidiary. Bank of America, the biggest U.S. lender, has a very extensive network of retail banking locations in the U.S. The Bank was founded in 1874 and its headquartered in Charlotte, NC.

Bank of America's stock range is defined by its calculated support defined at $6.90 and by the resistance level at $7.85; the stock is clearly over-extended from support, making it harder for participants to establish fresh longs.

Traders don't have a clear entry point for Bank of America. However, as the stock pulls back towards $6.90 it will definitely provide a reference point to establish a trade. On the other hand, if the stock breaks above its resistance level at $7.85 then traders will get an opportunity to enter the stock as it moves to a higher range.