I have been successfully trading Bank of America from the short side since they announced their $19 billion offering. However, it has been a very frustrating experience. Every morning I wake up and find that either John Paulson leaked something saying that the stock is worth nearly double or some sell side analyst is upgrading the stock.
Yesterday, a Morgan Stanley analyst said that the stock had a 70% chance of going to 30 next year. The options market is pricing in less than a 7% chance of that occurring. This morning UBS is initiating it as a buy. As it stands the stock has 24 Buys, 8 Holds and 0 Sells. Only 8 more upgrades to go.
I will be out of this short in the next few days as my thesis was strictly based on a supply/demand argument. That said, I have no interest in buying a stock with such lopsided sentiment and would not be surprised to see it drop further.