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Varchild2008 (86.15)

Bank of Hysteria....Anyone care about RSI values anymore?

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April 14, 2009 – Comments (9) | RELATED TICKERS: BAC

Nearly all of the banks have RSI near or above 70% indicating critical status.
Wachovia has now come out and said "hey! Stop!! Market Perform!!  Underperform!!" on several banks except for the outperform rating to Goldman Sachs.

This is ludicrous.

I personally didn't rack up tons of shares of Bank of America at single digit prices for a quick buck.
I got into Bank of America for the long term value of owning a bank stock period.

The financial sector belongs in a portfolio just as much as a good Beverage Company (HANS) (DPS) (KO) (PEP) Wim-Bil Dann.

The traditional value of Bank stocks has always been that they tend to be really good dividend payers during good times.   Sure, dividends have been slashed to almost ZERO across the board except for the strongest banks that have the least amount of Toxic waste (TCB) (GS) (WFC).

But, eventually the bad banks (C)  / (BAC) will start increasing their dividend payouts.  Might be 5 years from now.. Might be 2 years.... Eventually....

But, I guess Wall Street doesn't want us long term investors to gain thousands of shares at ridiculously undervalued prices....so the Share price escalates in less than 1 month to double digits for Bank of America.  Quadruple.

Tons of people are out there screaming bloody murder on the banking sector because the share prices have gotten way out of hand..... They no long reflect the "Past" and thus don't reflect the Toxic Waste the banks still have on their balance sheets.

But, I agree with the negative sentiment... It really does not make sense to have any stock trade up day in and day out with much of a Pull-back in between.

The RSI can only stay above 70% for so long before the stock comes crashing back down to reality.  The reality is Bank of America 2007 is going to be quite awhile yet.  If Wall Street can only ignore "Valuation" for only so long...

I don't expect much of a pull back.. I'm not asking for much.   Drop the thing down $2....$1.75....
Oh.. I'll take 25 cents! 

Course in all seriousness....  I am completely avoiding APRIL in terms of buying any more shares of BAC.  I want to see how the pricing starts behaving after April 20th's earnings release and conference call.... I want to hear that conference call to get a better handle on things.

I agree with an ALL STAR that back at $6 a share or so said that BAC should be priced at $14.00 a share.  That's fine.... But I want the conference call and earnings release to confirm that.

Roughly $13.22  is approximately ZERO for BAC..... That means year to date BAC trades with no drop or increase in price year to date.  That's a resistance level that should be a Mack Truck for optimistic Wall Streeters to really think about before buying and buying and bidding BAC up further.

9 Comments – Post Your Own

#1) On April 14, 2009 at 9:12 AM, RookieQB (29.19) wrote:

I think you might miss out on some gains regardless how you feel about the stock. The anticipation of earnings plus shorts covering are pushing this thing up.

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#2) On April 14, 2009 at 9:29 AM, Varchild2008 (86.15) wrote:

I'm selling a very small amount of shares of BAC today (Disclosure).

I'll still have truck loads of the stock... But I need the money in case (DPS) or (ATVI) takes a plunge...

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#3) On April 14, 2009 at 10:19 AM, RookieQB (29.19) wrote:

I sold all my BAC on Thursday last week just to see it go up another 15% on Monday. Pissed me off lol.

 

I just bought C and more BAC today. I'm not a fan of C but the trend is going up for them. I'm expecting at least $15 for BAC and $5 for C come Monday for BAC earnings. Then I will sell and take my profits. I've been waiting on ATVI also. I should have bought when it hit $8.50 but at that time it seemed like it was on such a downtrend that I thought I will go into the 7 dollar range.

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#4) On April 14, 2009 at 10:33 AM, Varchild2008 (86.15) wrote:

You have to buy any shares of any company on any downtrend when their track record (ATVI) is so darn good and they have billions of cash on the sidelines.

ATVI can make messes and still look good as long as that cash flow remains high.  It's like a baseball bat.

Set up your wide scales to something more reasonable like buy every single point down and you won't miss out on these downtrends.

I bought lots of shares of ATVI at $8.73.   Most of my buys fall between $10.54 - $8.73.

P.S.  I took some of my BAC profit and threw it in to WHR today and I am thrilled at simply knowing I get $24.50 or so in dividend payments every year.

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#5) On April 14, 2009 at 10:42 AM, bigpeach (26.89) wrote:

I don't think I understand your strategy. You're a long term investor, but you look at technical indicators like RSI and resistance? If you're planning on holding for years, why would you pay attention to those?

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#6) On April 14, 2009 at 10:43 AM, bigpeach (26.89) wrote:

I don't think I understand your strategy. You're a long term investor, but you look at technical indicators like RSI and resistance? If you're planning on holding for years, why would you pay attention to those?

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#7) On April 14, 2009 at 11:05 AM, RookieQB (29.19) wrote:

My nerves were shot from buying stocks just to watch them go down. It was definitely getting to me :p

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#8) On April 14, 2009 at 2:04 PM, Varchild2008 (86.15) wrote:

Just because I am a long term investor doesn't mean I sit and ignore the market trends.... Sit and twiddle my thumbs...

I manage my portfolio in a strategy known as "Weighted Analysis" err ok I made that one up as it is my own strategy.

Ok.... I have some stocks..

1)  BANK stock

2)  Consumer Non-Cyclical

3)  Consumer Cyclical

4)  Technology

So.. When I see the news of the morning read, "Consumer Spending Drops 1.1% in March"

Know what I did?  I went to Gallup and saw the Consumer Spending Chart for March and it looked like we hit a bottom in March as there was increased consumer buying in the first 5 days of April....  Spending eased after that... But still.. April is holding stronger than March..

The news doesn't bother to tell you what April is doing so GALLUP is my resource.

Based on that.... I knew that I was too light in Consumer Sensitive Stocks and too heavy in my Bank Stock.

So.. I went and grabbed some profits and took a portion of those profits and bought into WHR  (on the grounds APRIL is better than MARCH).

You have to WEIGH your stakes in your companys and judge your thesis... As you can find youself a bit heavy in any sector at the beginning of a short term decline in that sector.  I prefer to Re-balance my portfolio to deal with declines in a strategic manner rather than holding straight threw them.

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#9) On April 14, 2009 at 2:08 PM, Varchild2008 (86.15) wrote:

Any stock I have that is in CRITICAL RSI mode....  I have to reassess how heavy I am in that stock....

If I got STOCK A)   75%  RSI

STOCK B)   25% RSI

And STOCK  A  is  500 Shares

STOCK  B   is  100 Shares

Doesn't it make sense to take profits in Stock A.... Throw into Stock B????

I.E.  If a stock is getting waaay too much attention from buyers while another stock is getting completely ignored....

And you love how both companys are doing...

Then the reality is simple....  You will profit better in Stock B rather than Stock A for the next few months.

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