Asset Watch
Tuesday, March 21, 2023
So, while indiscriminate selling has hammered BofA in recent weeks, does the narrative contrast the fundamentals?
Recent history shows that weekly sell-offs on high volume often mark peak pessimism. In March 2017, December 2018 and March 2020, volume spikes coincided with major BofA bottoms. BofA also enjoyed a short 13.5% trough-to-peak rally in February/March 2018 after a high-volume decline.
With a similar sell-off present last week and BofA benefiting from the plight of smaller banks, the risk-reward seems attractive at these levels.
Are investors’ fears overdone, or will more pain confront the financial sector in the weeks ahead?