Higher rates would mean less borrowing. Less means less fees.

Bank of America (BAC) shares came under heavy selling pressure after CEO Brian Moynihan warned that third-quarter investment-banking fees are expected to decline by at least 10% from a year earlier. He projected investment-banking fees of roughly $1.6–$1.8 billion, compared with about $2 billion in last year’s third quarter, while sales and trading revenue is expected to remain roughly flat. The outlook disappointed investors following a particularly strong second quarter and sent BAC down more than 5% Monday. The warning also weighed on other large bank stocks, highlighting concern that capital-markets activity may not be translating equally across Wall Street firms.

Let’s look at how to target trades as this slides.

The chart reflects a significant deterioration in BAC’s short-term technical picture. The stock has broken below its 8-, 21- and 55-day exponential moving averages, while the PPO has turned negative and is accelerating lower. The ADX panel also favors the bearish side, with -DI near 30 compared with +DI near 15. ATR has jumped to approximately $1.28, showing that volatility has expanded substantially following the news. BAC is now testing support near $58.77; a decisive break below that level could open the door toward the next support area around $57.58, while a recovery above the 55-day EMA near $60.65 would begin to weaken the bearish setup.

Wishing you the best,

Wendy

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