Warren Buffett may be saying goodbye to a chunk of his Bank of America Corp BAC shares, but the charts signal a strong outlook for the stock. With the stock up 23.75% year-to-date and a solid 55.43% over the past year, BAC stock is still riding a bullish wave, even as Buffett’s Berkshire Hathaway Inc BRK BRK quietly steps back.
Buffett’s Recent Reallocation: Market Timing or Telling Trend?
In a notable maneuver that has raised some eyebrows, Buffett’s Berkshire Hathaway sold off 9.5 million shares of Bank of America over just three days last week at around $40 per share, netting $380 million. This latest sale diminishes Berkshire’s stake in BAC to below 10%, freeing them from immediate reporting obligations on future transactions.
Buffett has been gradually reducing his BAC holdings since mid-July. When inquired about the seasoned investor’s divestment, Bank of America’s CEO, Brian Moynihan, appeared unperturbed. “Life will go on,” Moynihan remarked, and certainly, it has – BAC stock surged by 5% on Friday despite the news.
Resilience in the Face of Shifting Shares: Charting a Positive Trajectory
While Buffett may be exiting the scene, the stock charts imply that the bulls are far from done.
Chart created using Benzinga Pro
BAC stock closed at $41.95, well above vital indicators such as its eight-day and 20-day simple moving averages, which stand at $40.07 and $39.82, respectively.
The stock also significantly surpasses its 50-day and 200-day moving averages, suggesting a sustained upward momentum.
Chart created using Benzinga Pro
The buying pressure is evident, with the MACD indicator reflecting a positive trend at 0.26. Concurrently, BAC’s relative strength index (RSI) is edging into overbought territory at 68.28, prompting investors to remain vigilant for a potential cooldown.
Nevertheless, the stock firmly maintains its position above its Bollinger Bands range of $38.31 to $41.02, indicating further room for growth.
Anticipating a Positive Earnings Boost: The Impact of Q3 Results
With third-quarter earnings slated for release on Tuesday before the market opens, investors are eagerly awaiting the outcomes.
Analysts anticipate earnings per share (EPS) of 77 cents and revenues around $25.28 billion. Should Bank of America surpass these projections, the stock’s upward trajectory may receive an additional uplift, notwithstanding Buffett’s recent disinvestment.
As Buffett reshuffles his portfolio, Bank of America’s stock displays fortitude, consistently signaling bullish trends. With the wind still at the backs of the bulls, the forthcoming earnings announcement holds the promise of propelling BAC stock to even greater heights.