Bank of America Shows Promising Technical Signals
The financial sector has generally struggled compared to the S&P 500 since April 2025, but several major banks are demonstrating encouraging technical indicators. Let’s dive into what’s happening with Bank of America (BAC). The recent breakout seems to mark the start of a new upward trend.
On the daily chart, two prominent downtrend patterns appear since April’s lows. Notably, July and August showed a classic bull flag pattern, which is essentially a temporary reversal characterized by lower highs and lower lows. When BAC broke out in mid-August, it surpassed both its 50-day moving average and trendline resistance, confirming a shift into a new uptrend.
After peaking around $53 in September, BAC entered a phase of sideways trading, finding support at the swing low from that month and at its 50-day moving average. By mid-October, the stock retested previous resistance but ultimately broke through to reach a 52-week high this week.
So, what makes us believe this breakout could lead to further gains? The weekly chart indicates that this rally is part of a broader multi-year bullish trend that started from the October 2023 lows. Following the declines in March and April 2025, BAC not only recovered its previous high but continued climbing. We’re viewing this chart as “innocent until proven guilty,” as it maintains a robust uptrend backed by strong momentum, with no significant warning signs from a trend-following perspective.
Improved volume metrics could certainly affirm this price breakout. Notably, the Chaikin Money Flow (CMF) turned negative during the rebound from July to August, indicating that institutions were liquidating their positions, which led to heightened volumes during down days and marked a distribution phase. After the breakout in mid-August, the CMF flipped positive, signaling a new accumulation phase for BAC. With Chaikin’s money flow on the rise, if the indicator remains above the important zero level, we could see renewed bullish sentiment for this banking giant, possibly leading to further highs.
