Bank stocks anyone?

[disneysteve]

Am I the only one here thinking the bank stocks are starting to look attractive again?

[kv968]

Although I've traded them in the past, I don't like to get too involved with banking stocks. Their financials are just too hard to decipher and aren't transparent at all. You can't figure out what they own and what owe really.

As far as buying into them now? I guess it depends on which ones you're thinking of and your timeframe. BoA and Citi are looking terrible technically. If anything, maybe JP Morgan and/or Wells Fargo might worth a shot. You could always try the Financial ETF XLF. The chart on that doesn't look too good either but it may be finding support.

I just think with all that happened with JPM recently, adding to a bigger push for the Volker Rule and such, banks may be having a hard time in the near future. But then again, they always say, invest on bad news. You just have to hope that it doesn't get worse.

But to answer your question, all in all, I'm not really finding them that attractive.

[snafu]

Steve: have you looked t BBT-N? I plan to buy this stock before the end of the month. What is your Bank segment ETF?

[disneysteve]

I decided to take a chance in my trading account (my SEP-IRA) and bought into BAC at $7.00. I didn't go in big and I'm in no hurry so I think over time, it will pay off.

[kv968]

I decided to take a chance in my trading account (my SEP-IRA) and bought into BAC at $7.00. I didn't go in big and I'm in no hurry so I think over time, it will pay off.

It's worth a shot. It looks as if it found some support around $7 so you might be good. The next support is around %5.25 or so but if you're looking to hold long-term I think you'll make out pretty good. Might be a little rocky but if you can stomach it you should be good. Good luck.

[disneysteve]

It looks as if it found some support around $7 so you might be good.

That was my sense as well. I also left myself funds in the account so that if it drops down to the $5 range, I could buy more and reduce my average cost basis. I didn't buy this to flip overnight. I think 6 months or a year from now, this will pay off. Besides, I love rollercoasters.

[tripods68]

I decided to take a chance in my trading account (my SEP-IRA) and bought into BAC at $7.00. I didn't go in big and I'm in no hurry so I think over time, it will pay off.

I'm tracking this stock as well....but i'm waiting to see if the stock will go down in the low 6s before i get in.

[ukgaz]

I brought BAC in the high 5's and then sold a covered call for added profit - it's currently below my strike price of 7.50. BAC is certainly a rollercoaster!

[kv968]

That was my sense as well. I also left myself funds in the account so that if it drops down to the $5 range, I could buy more and reduce my average cost basis. I didn't buy this to flip overnight. I think 6 months or a year from now, this will pay off. Besides, I love rollercoasters.

I don't know how you feel about options, but you could do what ukgaz does and sell covered calls.

For example, if you bought 100 shares at that $7 level, the $8 July calls are selling for about $24. Commissions aside, which may eat into the strategy significantly depending on your broker, if BAC doesn't trade above $8 in that timeframe and you don't get called away, you could make a 3.4% profit ($24/$700=3.4%). Or looking at it from a cost basis point of view, your $7 shares would now be at $6.76. If you're using Scottrade, even with their commissions figured in it would still be a 2.3% gain.

If it does get called away at $8 dollars then you'd have made a 17.7% profit without commissions, (3.4% from the sold call plus the $100 on the $8 strike price). If it doesn't trade above that price then you still get the 3.4% and can do it all over again. Kinda like making your own dividend. Of course, the downside is the stock skyrockets and you'd have to sell it at $8 unless you bought the call back.

Just something to think about. And you don't have to do it now. It would be even better if the stock was up to say around $9 and you were thinking of selling anyway. Instead, sell the $9 call, get a little extra money and the stock could get called away at the price you were looking to sell at regardless plus you'd get the premium. Of course this is all relying on what the stock does and if you get called away or not but it's something to look into if you have the time and would like to mess around and squeeze out a little extra profit.

[disneysteve]

I decided to take a chance in my trading account (my SEP-IRA) and bought into BAC at $7.00. I didn't go in big and I'm in no hurry so I think over time, it will pay off.

So far, looks like I got in at a good time. BAC closed just over $9 today so I'm up 29% in about 3-1/2 months. Now the question is how long to hold it. That's always the tough part. I have a remarkable history of selling things too soon only to see the stocks continue to rise far past where I sold them.

[kv968]

So far, looks like I got in at a good time. BAC closed just over $9 today so I'm up 29% in about 3-1/2 months. Now the question is how long to hold it. That's always the tough part. I have a remarkable history of selling things too soon only to see the stocks continue to rise far past where I sold them.

Congrats Steve. At least you're not having to worry about when to sell it to cut your losses

Throw a trailing stop on it and let it go.