New Federal Reserve Chairman Jerome Powell has given his first testimony before the House Financial Services Committee.
Investors who were listening carefully got a rare stock tip from him. Of course, you needed to be experienced at reading the tea leaves of Fed speak to get the tip.
I’ll share it with you, but, first, let’s start with a chart.
Please click here for an annotated chart of Bank of America’s BAC stock. Please note the following from the chart:
• The latest “up” leg has high momentum.
• Bank of America has gained about 40% in this up leg.
• There is no increase in volume during the latest up leg.
• The stock market has moved way above the 2008 pre-crash level, but Bank of America’s stock is still significantly below the pre-crash level. Those looking for bargains, take note.
• The Arora Report is holding shares of Bank of America from an average price of $7.69, as shown on the chart, and is still holding the position. The stock has quadrupled. Along the way, The Arora Report has given numerous buy signals for newer subscribers.
• Volume in Bank of America stock has been higher compared to the pre-crash levels.
The sum total of the foregoing is that there is more room for Bank of America stock to run, but the momentum is very high without an increase in volume. It is likely not sustainable without a correction.
The Fed chair’s tip
The Fed chair was more hawkish than expected. In plain English, this means more interest-rate increases are likely than the consensus believes….Read more at MarketWatch.
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