Stock Trading Predictions & Technical Analysis: BAC - Head & Shoulders Confirmation After All + Three Black Crows

Friday, October 2, 2009

BAC - Head & Shoulders Confirmation After All + Three Black Crows

BAC - SELL

On September 9th, I indicated that there was the possibility of seeing a bearish Head & Shoulders formations. I later debunked this observation after seeing BAC go over $17.50. But now it looks like we actually do have a Head & Shoulders formation confirmation, now that BAC has crossed down through its neckline. We also had two other bearish signals, first BAC crossed down its 50 day MA, BAC could fall back as low as $13.50. Finally we got a three black crows formation yesterday, with a third consecutive day hitting lower lows and lower highs. BAC is now a SELL.

4 comments:

UnknownOctober 5, 2009 at 4:11 PM
You mentioned a potential three inside up formation regarding RIMM recently. I'm thinking the BAC close today looks like what you described. Thoughts?
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YoelOctober 5, 2009 at 6:13 PM
What we are seeing with BAC is not exactly a three inside up pattern as today's trading range should have also been within Friday's range. However, BAC did break upwards back over its 50 day MA, which is very bullish and perhaps more so than if we had a three inside up pattern. Here are the criteria for a three sinside up pattern: http://www.20minutetraders.com/learning/candlesticks/three-inside-up-down.php
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DBOctober 6, 2009 at 9:10 PM
Yoel,

BAC seems to be fluctuating between 16 and 18. Do you still maintain a sell on BAC?

DP
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YoelOctober 6, 2009 at 11:42 PM
Until BAC clearly breaks up over $18.00, I wouldn't get in BAC. It's been trading sideways since the beginning of August, and as things stand right now I don't see much opportunity to many any decent return, whether it's on the long or short side.
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TECHNICAL INDICATORS

BUY SIGNAL: Indicates the possibility of the start of a new up trend or the continuation of the current up trend. This signal may be often given in the early stages of a potential new up trend that was preceded by a down or sideways trend. Such signals do not always succeed and may fail at time.

BUY: Indicates that the current up trend is already in motion and a BUY SIGNAL was already given earlier. A BUY does not necessarily indicate that the stock will continue higher from here, but simply that the stock is trending up. The further into the trend you decide to take a long position, the more risk you have of seeing it reverse back down sooner rather than later.

STRONG BUY SIGNAL: Indicates a stronger, more significant and reliable signal than a BUY SIGNAL which usually has less chance of failing. Such signals do not always succeed and may fail at time.

STRONG BUY: Indicates that the current up trend is already in motion and that STRONG BUY SIGNAL was already given.

SELL SIGNAL: Indicates the possibility of the start of a new down trend or the continuation of the current down trend. This signal may be often given in the early stages of a potential new down trend that was preceded by an up or sideways trend. Such signals do not always succeed and may fail at time.

SELL: Indicates that the current down trend is already in motion and a SELL SIGNAL was already given earlier. A SELL does not necessarily indicate that the stock will continue lower from here, but simply that the stock is trending down. The further into the trend you decide to sell a position, the more risk you have of seeing it reverse back up.

STRONG SELL SIGNAL: Indicates a stronger, more significant and reliable signal than a SELL SIGNAL which usually has less chance of failing. Such signals do not always succeed and may fail at time.

STRONG SELL: Indicates that the current down trend is already in motion and that STRONG SELL SIGNAL was already given.

HOLD: Indicates that traders who already hold this stock, should hold on as long as the trend persists. This signal is usually given during an up trend for which it would be considered too risky to take a long position at this point.

STRONG HOLD: Indicates that the current trend has been in motion for a while and rarely deviated away from the trend. Although the stock may continue higher, there may not be enough potential up side to trigger a BUY SIGNAL. This type of indicator usually means that the stock has very strong support levels which may have been tested but not broken.

WAIT: Usually given during a sideways trend for which we are waiting for a move that would trigger a BUY SIGNAL or SELL SIGNAL. This could also indicate uncertainty and the risk that would be taken if you were to take a long position at the current level. Taking a long position after giving a WAIT indicator is considered a gamble.