Fargo fountains (WFC) – Get the report was one of three big banks to start earnings season on Friday, joining JPMorgan Chase (JPM) – Get the report and Citigroup (C) – Get the report.
Down 6% so far, Wells Fargo is the group’s weakest performer.
Given the rally we saw coming to the event, it’s no surprise to see these bank shares selling out. Even with diving, they are still growing in the last few weeks and months.
Wells Fargo’s earnings of 64 cents a share exceeded analysts’ estimates of 58 cents. However, revenues missed consensus expectations.
So far, the shares are back on the trading lows at noon. Can Wells Fargo recover more or should investors plan for more disadvantages?
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Wells Fargo trading
Wells Fargo Stock Daily Chart.
Graphically, courtesy of TrendSpider.com
At one point, the shares fell by more than 8%, before the bulls began to intervene and bid for Wells Fargo’s larger shares.
This action could push the shares back above the 10-day moving average, which would be a relatively healthy price action and would show investors’ commitment to the bank.
We will use this observation as a way to evaluate the Wells Fargo stock.
If it recovers the 10-day moving average, then let’s see if the shares can return above the resistance value of 33.50 USD and the withdrawal of 38.2%. If possible, the recent high near 35 USD is on the table, followed by a possible move to the 50% withdrawal, almost 37.50 USD.
The disadvantage has several areas of interest. Like the 10-day moving average, we will use these areas to assess investors’ interest in stocks.
In other words, if Wells Fargo shares cannot claim the 10-day moving average, traders should be open to the possibility that the shares will fill the January 6 gap of nearly $ 31 and test the 21-day moving average.
If this is not maintained as a support, then the area from 28 to 29 USD is on the table.
In that area, the Wells Fargo stock finds plenty of potential support, including a 50-day moving average, a VWAP measure, a 23.6% withdrawal and a reassessment of the December take-off level.
Finally, if Wells Fargo really feels the selling pressure, the 100-day, 200-day moving averages could be a possible landing point. Currently, these measures are just under $ 26.50.