Wells Fargo (WFC) has just returned to the Green Favored Zone of the SIA S&P 500 Index Report for the first time since the end of 2014. The shares climbed 6 spots yesterday on a 5.8% rally after the bank reported earnings and are up 29 spots in the last month.
A major breakout is underway in Wells Fargo (WFC) shares this week regaining $40.00 for the first time in a year. This confirms that the recovery trend which started back in November remains active and builds in the previous snapping of a downtrend line and the completion of a bullish Ascending Triangle base with a breakout over $35.00. Note that both breakout points have reversed polarity to become support levels.
Next potential resistance on trend appears at a downtrend line near $47.50, then $50.00 where a measured move and round number converge, followed by the fall 2019 high near $52.50 and the early 2018 peak near $59.00.
Wells Fargo (WFC) provides an excellent example of how some stocks and sectors which had initially lagged behind the 2020 market recovery have started to attract renewed interest and have been catching up in recent months. WFC shares continued to trend downward through the spring and summer of last year and didn’t finally bottom out until November. Between November and January they staged an initial high pole advance. Following a correction, the shares snapped out of a downtrend in February and haven’t looked back since, recently regaining the $40.00 level.
Initial upside resistance may appear near $44.45 where both support and resistance have appeared previously, then the $50.00 to $51.50 area where a round number, horizontal count and previous column high cluster, then $53.15 based on previous column highs and $56.40 based on a vertical count. Initial support appears near $38.70 based on a 3-box reversal.
With a perfect SMAX score of 10, WFC is exhibiting near-term strength across the asset classes.
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