Shares of Bank of America were notable movers in early morning trade today. The stock was higher by close to 2 percent on the back of higher volumes which is considered to be a bullish sign. The price volume action is a clear suggestion of a shift of momentum towards the buy side which is being seen as a huge positive by traders and investors on the street. The price volume action has also meant that the stock is an outperformer when compared to the broader market which is considered to be bullish sign for the near term by traders on the street.
One of the key reasons for the rally in the stock was on the back of reports that the consumer banking giant had swung to a profit in the third quarter helped mostly on the back of lower borrowing costs and legal expenses. Bank of America reported that it had earned $4.1 billion or an earnings per share of 37 cents per share for the three month period ending in September which is being seen as a huge positive by analysts and investors on the street. This compares to a loss of $470 million in the same during last year. It is imperative to state that Bank of America booked $6 billion in legal expenses last year to help cover part of the $16.65 billion legal settlement it reached with the Department of Justice.
When looking at the charts for Bank of America, the stock has been in a strong downtrend over the past month. The relative strength index and the momentum indicators for the stock have given a buy signal on the back of the price volume action seen during the trading session today. Traders on the street believe the stock could head to levels of $15 in the near term.