BAC Short Idea - Top 5 Weekly Trade Ideas #1

1 Sep

I don't normally care about what insiders or large funds do because you can never know the motive of that person. However, Warren Buffet has been dumping his stake in BAC lately. He had a very large stake, so it appears he is expecting BAC to see some downside, or he simply wants the cash for something else. I wouldn't want to be longing something Buffet is dumping like this, but he usually has a much longer time horizon than most so I wouldn't expect it to work right away. Buffet has been indicating for several months that he prefers cash over equities right now, something to consider.

That being said, we can use TA on top of everything else to optimize risk/reward. The chart is bearish, it recently broke below a major uptrend from 2023. It's had a nice recovery, but is nearing a retest now. I'll look for puts if it retests the trendline, I'd expect it to reject and eventually break the recent lows as well. It's not super short term idea, but I do think there's a good chance of some short term downside soon. I think this is a trade you can buy lots of time on and just relax. I'd expect a stable decline in the future unless it reclaims that major trendline from 2023.