Finally, the long awaited event has happened - US financials (and that includes BAC which just broke its 50-week resistance) are turning the corner. They are the only sector that have not moved up with the market last year. Over the past month, the sector has been demonstrating impressive relative strength against the broad market. Indeed, Jason Goldberg, who heads the bank equity research team at Barclays Capital, notes that favorable GDP growth, a rising stock market, and stable short-term interest rates in 2011 bode well for the performance of financial stocks in the New Year. Since 1949, there have only been eight years where these three factors were present; and in all eight years banks stocks finished higher. And they outperformed the broad market in six of those eight years.
Therefore, what I will do is sit back and reap my just reward on BAC.
No comments:
Post a Comment