Wells Fargo (WFC) – Get the report was one of the top three banks that started the profit season on Friday and joined JPMorgan Chase (JPM) – Get the report and Citigroup (C) – Get the report.
Wells Fargo, with a 6% drop in the day so far, is the group’s worst performer.
Given the concentration we saw entering the event, it’s no wonder these bank shares are selling out. Even with the decline, they continue to rise over the last few weeks and months.
Wells Fargo’s earnings of 64 cents per share exceeded analysts ’estimates of 58 cents. However, revenue lost consensus expectations.
So far, stocks have bounced back to lows in the midday trading. Can Wells Fargo recover more from losses or should investors plan for more disadvantages?
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Wells Fargo Trader
Daily chart of Wells Fargo stocks.
Chart provided by TrendSpider.com
At one point, shares fell more than 8%, before the bulls began to intervene and offer higher Wells Fargo shares.
This action could push shares above the ten-day moving average, which would be a relatively healthy price action and show investors ’commitment to the bank.
We will use this observation as a way to measure Wells Fargo stock.
If it recovers the ten-day moving average, let’s see if the stock can once again exceed the $ 33.50 resistance mark and the 38.2% decline. If you can, the recent high of about $ 35 is on the table, followed by a possible 50% setback to about $ 37.50.
The downside has a couple of interests. Like the ten-day moving average, we will use these areas to assess investor interest in stocks.
In other words, if Wells Fargo shares cannot recover the ten-day moving average, traders should be open to the possibility that the shares will fill the gap as of Jan. 6 near $ 31 and try the 21-day moving average.
If that doesn’t support it, then the area about $ 28 to $ 29 is on the table.
In this area, Wells Fargo shares find a lot of potential support, including the 50-day moving average, a VWAP measure, the 23.6% decline and a new test of the December breakout level.
Finally, if Wells Fargo really felt the selling pressure, the 100-day, 200-day moving averages could be a possible landing point. Currently, these measures are just under $ 26.50.