Bank of America Rally Continues

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Shares in Bank of America have continued their recent strong performance this week. The stock is trading over 1% higher pre-market on Wednesday following a more than 2% rally on Tuesday. BOA has outperformed its competitors this week with the stock continuing to extend the gains posted over recent weeks following a solid Q2 earnings report.

Slid EPS Beat

Bank of America reported a Q2 EPS of $0.37, beating estimates of a $0.28 EPS as predicted by Wall Street. The US banking giant recorded net revenues of $3.5 billion. This includes a $4.0 billion reserve build linked to the weaker economy seen during the height of the COVID pandemic. Provision for credit losses was seen growing to $5.1 billion, fuelled mainly by the $4 billion reserve build.

Looking at the breakdown of the bank’s main businesses, global banking recorded the largest increase in revenues, post net income of $1.9 billion over the quarter. Sales and trading revenues were seen at $4.2 billion, including net debt valuation of adjustments losses of $261 million.

Record Banking Fees

Global banking recorded net income of $726 million, with record firm-wide investment banking fees of $2.2 billion. This marks a 57% rise on the same period a year earlier and placing BOA 3rd in terms of investment banking fees.

CEO Praises Strong Performance

Commenting on the results, BOA chairman and CEO Brian Moynihan said:

“In the most tumultuous period since the Great Depression, we delivered for our clients, our employees, our communities, and our shareholders. “Strong capital markets results provided an important counterbalance to the COVID-19-related impacts on our consumer business, and our industry-leading digital capabilities allowed us to support clients amid difficult working conditions.”

He further said:

“We provided billions in credit to clients; announced a $1 billion, four-year commitment to drive economic and racial equality in our communities; strengthened our balance sheet by increasing deposits, capital, and loan loss reserves; invested in technology and equipment to help keep our employees safe; and delivered for shareholders, earning more than twice our quarterly dividend.”

BOA Breaks Above Bearish Trend Line

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Shares in Bank of America have seen a firm rally off the summer lows posted just ahead of the bank’s Q2 earnings report. Having found firm demand at the 22.48 level, price has continued to move higher within the bullish channel which has framed the recovery. Price has now broken above the bearish trend line from 2020 highs. For now, sentiment remains bullish.

To the topside, the main levels to note are the 26.21 (currently testing) and 28.97 regions. To the downside, should price break below the rising channel support the next structural level is down at the 22.48 region.

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