Like all equity, Bank of America's (NYSE:BAC) appears to be well on the road to becoming dead money. Let me show you why I believe this...
Last July (2008) BAC volume markedly picked up as the stock bottomed. During its subsequent screaming counter-trend rally — a massive short squeeze — beefy volume registered at its start was even exceeded at its end. Truly the work of strong hands, the likes of which whose BAC holdings probably netted well north of $30 per share.
Fast forward Q1 '09 ... and another high volume bottom. This time strong hands were accumulating shares from many a nervous Nelly.
Then, after anywhere from a 100-400% gain was realized, what did strong hands begin doing from mid-April through early May?
That's right... They said, "Here Shemp, have some BAC to go with that prescient June 30th real estate bottom call of yours!"
And since then, what does Mr. Risk Averse make of still elevated volume (though considerably diminished from May '09 peak readings)? What does the future hold for BAC bulls?
Well, let's ask Chip Diller...
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© The Risk Averse Alert — Advocating a patient, disciplined approach to stock market investing. Overriding objective is limiting financial risk. Minimizing investment capital loss is a priority.
Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.
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