Warren Buffett may be parting ways with a sizable chunk of his Bank of America Corp (BAC) shares, but the stock’s trajectory remains optimistic. Boasting a 23.75% increase year-to-date and a solid 55.43% surge over the past year, BAC stock continues to ride a bullish wave despite Buffett’s Berkshire Hathaway Inc divestment.
Buffett’s Selloff: Strategic Move or Shifting Trend?
Buffett’s recent move to sell off 9.5 million shares of Bank of America over three days last week at approximately $40 per share, generating $380 million, has caught the market’s attention. This divestment signifies Berkshire no longer holds a 10% stake in BAC, eliminating the necessity for immediate disclosure of future trades.
Not the first time Buffett has reduced his BAC holdings, he has been shedding shares since mid-July. Bank of America’s CEO, Brian Moynihan, appeared unperturbed by the sell-off, stating, “Life will go on.” True to his words, BAC stock surged 5% on Friday, demonstrating resilience in the face of Buffett’s actions.
Bulls in Command: Positive Indicators Pointing Upward
While Buffett moves towards the exit, the stock charts project an ongoing bullish trend.
Chart created using Benzinga Pro
Closing at $41.95, well above essential indicators like the eight-day and 20-day simple moving averages at $40.07 and $39.82, respectively, BAC stock remains robust. Additionally, it surpasses both the 50-day and 200-day moving averages, indicating sustained upward momentum.
Chart created using Benzinga Pro
Evidence of buying pressure is clear, with the MACD indicator indicating a positive trend at 0.26. Concurrently, BAC’s relative strength index (RSI) is creeping into overbought territory at 68.28, suggesting investors be cautious for a potential cooldown. Nevertheless, trading well above its Bollinger Bands range of $38.31 to $41.02, the stock seems poised for further growth.
Q3 Earnings Impact: Potential Fuel for Growth
Set to release third-quarter earnings before the market opens on Tuesday, investors eagerly await Bank of America’s performance.
Analysts anticipate earnings per share (EPS) of 77 cents and revenue around $25.28 billion. A surpassing of these estimates could provide an additional boost to the stock’s bullish trajectory, despite Buffett’s gradual exit.
Despite Buffett’s repositioning, Bank of America’s stock remains steadfast, displaying consistent bullish signals. With momentum favoring the bulls, the upcoming earnings release holds promise for further gains in BAC stock.
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