Financial services name Bank of America (BAC) has pulled back from its June 3, 13-year high of $43.49 in recent months. The equity is still outperforming the broader market with a 58.4% year-to-date lead, however, and just announced its credit card delinquency and charge-off rates improved in August. What’s more, the shares have recently come close to a historically bullish trendline, making now an ideal time for investors to bet on BAC’s next move higher.
Digging deeper, Bank of America stock just pulled back to its 160-day moving average, after spending some time above this trendline. According to data from Schaeffer’s Senior Quantitative Analyst Rocky White, similar moves have occurred three times over the past three years, with the security enjoying a positive one-month return 67% of the time, averaging a 5% pop. A comparable move from its current perch would put BAC back above the $42 mark.
A shift in the options pits would fuel additional tailwinds for the equity. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), BAC’s 50-day put/call volume ratio sits higher than 92% of readings in its annual range. This means long puts are being picked up at a quicker-than-usual clip in the last two months. Echoing this, short-term options traders have rarely been more put-biased. This is per Bank of America stock’s Schaeffer’s put/call open interest ratio (SOIR) of 0.98, which ranks higher than 82% of readings from the past 12 months.