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Trade Bank of America Corp (BAC) Stock Into the Earnings Fog

Bank of America Corp (NYSE:BAC) stock has had quite the run since last November. And coming into its earnings season BAC stock is pushing up against its recent highs. Usually this precludes me from selling puts below these elevated levels. But BAC’s fundamentals are very reasonable. It trades at 15 times earnings and in line with its book price. I am not afraid to commit long and eventually own the shares if price goes against me.

Trade Bank of America Corp (BAC) Stock Into the Earnings Fog More

So today I want to sell puts into the earnings uncertainty for income. This is a shorter-term trade that I am not afraid to turn into an investment. After all, BAC is a quality bank and owning it a few percent cheaper than even these already reasonable levels cannot be a massive mistake.

Usually, higher highs that come too fast worry me from a technical perspective. A fast rise in a stock traces out a rising wedge that if broken uncovers weak hands and the selling...