Wells Fargo (WFC) – Get report was one of the three major banks to launch its earnings season on Friday, joining JPMorgan Chase (JPM) – Get report in Citigroup (C) – Get report.
With 6% lower on the day so far, Wells Fargo is the weakest in the group.
Given the rally we saw at the event, it’s no surprise to see these bank shares sell. Even with the immersion, they have been great for the past few weeks and months.
Wells Fargo’s earnings of 64 cents per share beat analysts’ estimates of 58 cents. Revenue, however, missed consensus expectations.
So far, stocks are bouncing the lowest in the afternoon trading. Can Wells Fargo recover more from the losses, or would investors want to plan more downsides?
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Trading Wells Fargo
Daily chart of Wells Fargo stock.
Chart courtesy of TrendSpider.com
At one point, the stock fell more than 8% before bulls started to jump in and offered the Wells Fargo stock higher.
That action could repel stocks over the ten-day moving average, which would be a relatively healthy price action and could show investors’ commitment to the bank.
We will use the observation as a way to measure the Wells Fargo stock.
If it recovers the ten-day moving average, let’s see if stocks can return above the $ 33.50 resistance and the 38.2% retracement. If it can, the recent high is near $ 35 on the table, followed by a possible move to the 50% retracement near $ 37.50.
The downside has some interests. Like the ten-day moving average, we will use these areas to determine the interest of investors in the stock.
In other words, if the Wells Fargo stock cannot recover the ten-day moving average, traders should be open to the possibility that stocks will close the gap from January 6 near $ 31 and test the 21-day moving average.
If not supported, the $ 28 to $ 29 is on the table.
In the zone, the Wells Fargo share finds an abundance of potential support, including the 50-day moving average, a VWAP benchmark, the 23.6% retracement and a re-test of the breakout level in December.
Lastly, should Wells Fargo really experience the selling pressure, the moving averages of 100 days and 200 days could be a possible landing spot. Currently, the measures are just under $ 26.50.