3 reasons to sell Bank of America stocks

The Federal reserve has risen again in short-term interest rates. Usually higher rates should be better for the bank shares. But perhaps it is time to stand short to Bank of America (BAC) shares. The reasons are purely technical.

First, Bank of America outperformed its peers so far this year, and this might set off a correction.

Second, at $25 a share, there is little upside left in the Brian Moynihan-led company.

Third, Bank of America trades at expensive valuations relative to its growth and competitors.

The company's recent performance has been encouraging. Bank of America's stock gained nearly 14% since the beginning of the year, compared to other Citigroup (C) 2.3%, JPMorgan 6.3%, as well as Goldman Sachs and Wells Fargo is much more.

Better outperformance of the company, which may be associated with potential environment with high interest rates can not last long. This is why it's better for investors to take profits off the table.

The shares are expected to rise further by maximum of $1 to $26 per share, according to the average estimate of analysts. This indicates that the stock carries more risk than reward.

Source: TheStreet

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