The Options For Trading Bank of America (BAC)
Bank of America (BAC), like Netflix (NFLX), has been one of the year's most talked about stocks. Before 2008, it would have been hard to believe we'd have a market that put BAC in $5 territory (or $2.50 back in 2009), but such has been the case of late.
You have tons of rumors swirling around on the stock from the latest at Wikileaks, to the hedgies trying to kill the stock and the company itself, to numerous other theories. Somebody said the other day in the SharePlanner Chat-Room that they thought BAC was 'too big to fail' which may very well be true, and I tend to agree that it is (unfortunately). Our country has become the land of the bailouts, and unless it can suddenly become drastically laissez faire, then I can't imagine the Fed, President and Congress wouldn't do everything they can to bail out this company should it decide to go Chernobyl from here.
As for the stock price below, you have a perfect double bottom being formed at the $5 level, and while we are a good 18% off of that bottom, the prospects for a significant move higher in the future looms large. If that $5 level holds and we move higher, breaking through the initial downward channel and into the upper channel, we should see it move as high as $7.75 before meeting the next resistance level.
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