Bank of America Corporation (NYSE: BAC) stock is falling after an analyst at Oppenheimer & Co. cut her 2008 profit outlook on the stock to $3.25 per share from $3.65 per share. In a note to clients, she added that a weak housing market and pressure on U.S. consumers could lead to further estimate and price-target cuts on U.S. banks. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on BAC.

After hitting a one-year high of $52.96 in October, the stock hit a one-year low of $33.12 in January. This morning, BAC opened at $40.23. So far today the stock has hit a low of $39.00 and a high of $40.45. As of 12:00, BAC is trading at 39.89, down $1.08 (-2.6%). The chart for BAC looks bullish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bearish hedged play on this stock, I would consider a May bear-call credit spread above the $47.50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in 8 weeks as long as BAC is below $47.50 at May expiration. B of A would have to rise by more than 18% before we would start to lose money.

BAC hasn't been above $47.50 since October and has shown resistance around $43 recently. This trade could be risky if the financial sector straightens itself out quickly, but even if that happens, this position could be protected by resistance BAC might find at its 200 day moving average, which is currently around $46 and falling.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in BAC.