BAC April 20

BAC April 20

Bank of America (NT & SA, as it used to be called) now owns Merryll Lynch Pierce Fenner & Smith and Country Wide and according to Mr Lewis this financial machine has the potential of generating about $5 per share which would easily put the stock at $50 in a few years. Then there is Meridith Witney who would not buy any major bank at this time . My guess is that reality is somewhere in the middle. Looking at the chart we have to be mindful of the fact that the ups and downs are not always meaningful (this one went from $17.50 to $ 37.50, predictable by the way, or about 120% before continuing the drop). But when trying to be reasonable one must agree that going from $50 to $2 IS a serious enough drop, we do not have to go further just to get to depression levels. In fact if this correction was an A-B-C A-B-C then maybe we have seen the lows. First indication is that the move from the low is a 5-wave move (possible the start of a bull market but at the very least a first (out of two) legs up in a corrective rally. Should we drop to about $7-$7.50 this may well be a great buy! Here is the picture in more detail. Do not try this with Citi Group

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