Some Technical Analysis Background on BAC:

As of this writing, at this minute, the share price of Bank of America Corporation remains at $13.17

The share prices of Bank of America Corporation (Public, NYSE: BAC) had been dropping since the high of $19.864 on April 15. If you pull up the charts, since the April crisis where the high volatility has started, its shares hasn’t stabilized, until today. The share price has risen slightly today, after 3 days of tight trading range. It has also formed a very nice Christmas Tree since Feb 2010 this year.

Fundamentals:
And if you ask for the reasons, partly was the crisis in April brought in by BP, Earnings Season of Q2 losing out to Q1, and the Euros Crisis. What’s worst was the Q3 Earnings for Bank of America, which was weaker than expected, compared to Q1 and Q2. This casued the price to drop, gaped down, after rallying in speculation.

And now for my analysis, both on TA, FA, and QA on the predicted movements of BAC.

The share price for BAC has dropped quite alot, breaking through the support @ $14 year end 2009. Too many Shorts perhaps, no one wants to take a big part of it. I think it will stay around the range of $12- $14+. As long as the economy and the Fed doesn’t improve and increase the rates, its shares will hardly be moved.

To quantitatively hedge against this drop, I suggest shorting BAC shares to a minimum of $12 (that’s just $1), and Long any Financial Index ETF (Will cover this set of leverage instruments in my upcoming posts) I will suggest a 80% short while 100% Long, so the risk beta is lowered. But that’s just my view, use at your own risk!

Finally, I would stay put, and wait for further information before betting my stake at it.

Disclaimer: I do not own any BAC shares, but I am looking forward to own one.

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Managemoneyonline.com is a website, a blog that I have created to write down my ideas and experience I have encountered. These serve as a track record for me and myself and for everyone else to learn. Trading and investments is a difficult tasks.

I lost quite a few grands, about $9,000 for my first year of noobish trading. That was after the 2008 financial crisis and it was some bull run to 2010, but I still lost. While I am trying to learn “everything”, yes you heard it, everything about trading and investments, I will jot down some of my experiences, and strategies as well.

Well the main key words for this site, manage money, already tells you that I am all about managing money. Afterall, no matter how daring and how much risk profile you want to take, Wall street, or the stocks market is just a random reactions of ups and downs. No repeated patterns no nothing, because if there is, even a 3 year old kid could understand.

With that bad experience, I’ve went deeper and deeper into this art or science. On the second year of my trading, I started building a small portfolio, instead of blindly trading. Reading up and understanding even more detailed into investment banks, financial institutions and hedge funds, I wanted to do what the big guys are doing.

While I go about managing my small little portfolio, hoping to beat the market and growing equity, by measuring my performance with the general market / hedge funds. With strategies such as statistical arbitrage, law of one price, portfolio rebalancing and management, risk management, long/short equities, high income stocks and dividends, and other strategies that I’ve tried, this is the outcome of a true results of a trader who trades his own personal account.

I hope I am able to grow my own funds through this never ending, tiring process of seeking The Truth, the Alpha.

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