Can You Trust Buying Bank Of America

BAC is a buy now

Summary

Positive

Improved outlook for fixed income trading revenue.  

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An improved M&A environment, higher interest rates, an improving economy, and finally, a Republican sweep in November could prove a boon for the entire banking sector

The chart looks unappealing from the technical side - the moving averages are moving in the wrong way from each other, the bank hasn't been able to top major resistance at $16.25, and the bank looks to be in a mid- to long-term downtrend. However, for the mid-to long-term run, the technicals will eventually give way to a rosier picture for the bank.

An upgrade over at Deutsche Bank, who raised their outlook on the bank to BUY, with a price target of $18.

Negative

• One, the bank reported a $4 billion error in its books to the Federal Reserve. As a consequence, it had to suspend a share buyback and its planned spike in quarterly dividends.
• Two, the bank has faced investigation into foreign-exchange trading violations.
• Three, the bank had to agree to pay $9.5 billion in fines to the Federal Housing Finance Agency. The civil lawsuit alleged that the bank had defrauded Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) by misrepresenting $57.5 billion worth of mortgage securities, an event that precipitated the financial crisis.

Bad Outlook For BAC Investors

Bank of America's stock price in 1994, 20 years ago, at ~$14 is nearly the same as it was at the close on June 30th, $15.37.

I believe Bank of America is an attractive long-term purchase at these levels, and I remain bullish on the bank. My money can ride with Buffett's any day of the week. 

Target $25 -$35 in 2017

Best of luck to all investors.