How to trade NYSE:BAC from here around this $7.50 area after the big $5 support bounce

If you like this type of analysis let me know on twitter or use the TWEET button above & i’ll do more of these in 2012

How to trade NYSE:BAC ( Bank of America Corporation) from here:

******* if the notes below are cut off they are all on the chart below : so click chart & you will see them all: *****
$BAC chart analysis and notes

Had someone on twitter today ask where to take profits on a stock like BAC since was lucky to have bought it into the $5 dip
If you ever get in a situation like $BAC that you have a nice profit to protect after the nice bounce from $5
So here are some suggestions on what I’ve done in the past in these situations:
As you can see we are nearing critical resistance too
So I suggest :
1) sell portion of position 1/3 to 1/2 into this $7.35- $7.50 to protect profits (nothing ever wrong with locking up profits since u can always re-enter or use the money elsewhere

2) if dips to $6-$6.50 or down to $5 again rebuy what you sold or locked profits on or a more aggressive strategy

3) keep a protective stop so you only lock up profits on any dips under $7 this way you still get the majority of this big January run – Also if continues over $7.50 than trail the stop to that point or over $8 ( 200day use 7.90-$7.50 as profit protect area)

4) if you do sell then you can always re-enter again on any break over that $8+ (critical 200day sma ) which we’ve not seen break since last April

The final strategy if you don’t scale out or use a protective stop is take all the profits out here: but don’t let a profitable trade as big as this one turn into a losing or break even trade


Check the notes on the chart & hope you find this helpful

If you like this type of analysis let me know on twitter or use the TWEET button above  & i’ll do more in 2012 of trades i’ve done or interesting chart patterns that I use.

Click on the chart twice to see on separate page with large notes .

Happy Trading,

Stockguy22

NYSE:BAC Bank of America Corporation

 

Posted in Charting & Analysis