A Change in Tides: Buffett’s Recent Selloff
In a surprising move, Warren Buffett’s Berkshire Hathaway shed 9.5 million shares of Bank of America over three days, garnering $380 million. This divestment, coming at around $40 per share, reduced Berkshire’s stake in BAC below the 10% threshold that necessitates immediate disclosure of future trades.
This sell-off isn’t a one-off event. Buffett has been gradually offloading BAC shares since mid-July. Bank of America’s CEO, Brian Moynihan, responded with nonchalance, stating that “life will go on.” Indeed, it seems to have done just that as BAC stock surged 5% following the news on Friday.
A Bullish Outlook: Charts Point to Further Upside
Despite Buffett making moves to exit, the stock charts paint a different picture.
Chart created using Benzinga Pro
Bank of America’s stock closed at $41.95, comfortably above key moving averages such as the eight-day and 20-day SMAs at $40.07 and $39.82, respectively. It also significantly outperforms its 50-day and 200-day moving averages, indicating sustained upward momentum.
Chart created using Benzinga Pro
The purchasing pressure persists, with the MACD indicator showing a positive trend at 0.26. Although BAC’s RSI approaches overbought levels at 68.28, indicating a potential cooldown, the stock comfortably exceeds its Bollinger Bands range of $38.31 to $41.02, suggesting further room for growth.
Potential Earnings Boost: Q3 Results on the Horizon
As Bank of America prepares to unveil its third-quarter earnings before the market opens on Tuesday, investor eyes are keenly fixed on the numbers.
Analysts anticipate an EPS of 77 cents and revenue in the vicinity of $25.28 billion. Should the bank surpass these projections, the already bullish trajectory of BAC stock might receive an added impetus, notwithstanding Buffett’s recent disengagement.
Even as Buffett alters his position, Bank of America’s stock stands steadfast, exhibiting consistent bullish signals. With momentum favoring the bulls, the forthcoming earnings report could serve as a catalyst for propelling BAC stock to even greater heights.