Shares of Bank of America Corporation BAC are on an upward trajectory following the company’s recent earnings report. They posted earnings of 90 cents per share, exceeding analysts’ expectations of 81 cents. In addition, their revenue of $27.37 billion also outperformed the anticipated $26.99 billion.

However, this upward momentum may soon face a hurdle. Analysts suggest that BAC could encounter resistance around the $39.70 mark. This price point had served as a support level in March; therefore, it is common for such levels to turn into resistance in the stock market. To highlight this shift, our technical analysis team has designated BAC as our Stock of the Day.

The chart illustrates that $43.25 was a previous support level in December, marking it as a significant price point for investors to consider.

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Many investors who bought shares near the $43.25 support were pleased with their decision when prices rose. However, subsequent drops in March led some to doubt their choices. Some investors chose to hold their shares, hoping to exit at breakeven rather than incur losses.

Consequently, when the stock price rebounded to $43.25, a large volume of sell orders appeared at the price points where investors had initially bought. This influx of sell orders contributed to the formation of resistance at a level that had previously been a strong support.

Following this, BAC experienced a downturn as sellers began to lower their asking prices, realizing that buyers would gravitate to the lowest available offers. This created a cascading effect, prompting additional sellers to further reduce their prices.

The $39.70 level served as support in March. Should BAC rally back to this point, it’s likely to find resistance there once more, as many distressed buyers from that period will seek to sell their shares at breakeven.

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