TopOptionAlert
Oct 25, 10:56 AM
$BAC NOV20 52C · still actionable
Zone:
$50.24 to
$50.94
Invalidation: close under
$49.25
Objectives:
$55, then
$58
The math: up 8.7% to the first objective and 14.6% to the second, against 2.7% risk on the invalidation, better than 5 to 1 to the second.
This is a swing setup, and the picture is plain. Dear friend, picture a big bank on sale after a rough month. Bank of America closed Friday at 50 dollars and 59 cents, down about 11 percent in a month, yet it still sits above its recent floor near 49 dollars and 25 cents. The street still expects about 63 dollars on average, so the gap between the price and the story is wide. If that floor holds, the walk back toward 55, then 58, is open, and a close under 49.25 tells you the idea is wrong.
P.S. Watch the October 28 Federal Reserve decision: a calm rate message is the kind of news that lets beaten down banks breathe again.
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