The Buying Zone Rebound Bank of America’s (BAC) stock is bouncing back from the Buying Zone after a drop into the Equal Legs area, known as the Blue Box. The analysis shows BAC is in a wave (4) pullback and forming an Elliott Wave Double Three pattern, with the Blue Box between 48.53 and 46.8. All long positions in BAC are now risk-free, with some profits already taken. The stock reacted positively to the Buying Zone and may rise further to the range of 53.95-55.69, as long as it stays above the pivot low of 48.32. It’s best to avoid selling BAC since the overall trend is bullish. The stock is expected to bounce at least 3 waves from the Blue Box, with a stop-loss set just below the 1.618 Fibonacci extension at 46.8. The Technical Setup Bank of America’s technical setup looks strong. The stock has held its pivot at the low of $48.32 and shows upward momentum. This is a good chance to buy short-term call options, aiming for strike prices of $53 or $54 to take advantage of the expected movement toward the $55.69 resistance level. This optimistic view is backed by BAC’s recent Q3 2025 earnings report, which exceeded predictions due to a 5% increase in net interest income year-over-year. Even though we’re optimistic about BAC, the overall market is mixed. The Dow Jones is struggling, and market volatility is rising. Therefore, it’s wise to protect long positions by buying put options on a broad market index like the SPY. The VIX index is currently high at around 23, making portfolio protection important against potential downturns from rising trade tensions. This market uncertainty stems from widespread expectations of a Federal Reserve rate cut. This sentiment has also driven gold prices close to $4,300 an ounce. Looking back, stubborn inflation throughout 2023 and 2024 has finally calmed down, with the latest September 2025 CPI showing 2.8%. This gives the Fed more reason to think about easing its policies. The ongoing weakness of the U.S. dollar reflects these rate cut expectations, opening opportunities in forex markets as well. Create your live VT Markets account and start trading now.

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