WFC pushes through Thursday's high
Wells Fargo & Company (WFC) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, WFC ended the week 0.79% higher at 48.22 after gaining $0.10 (0.21%) today, slightly outperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Trading up to $0.39 lower after the open, Wells Fargo managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on Monday, WFC gained 0.46% on the following trading day. Closing above Thursday's high at 48.18, the market confirmed its breakout through the previous session high after trading up to $0.13 above it intraday.
Daily Candlestick Chart (WFC as at Feb 14, 2020):
Friday's trading range has been $0.56 (1.16%), that's below the last trading month's daily average range of $0.68. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently significantly lower than usual for WFC. Prices continued to consolidate within a tight trading range between 47.42 and 48.49 where it has been caught now for the whole last trading week.
Two candlestick patterns are matching today's price action, the Bullish Spinning Top which is known as bullish pattern and one bearish pattern, the Hanging Man.
After trading down to 47.75 earlier during the day, the stock bounced off the key technical support level at 47.84 (S1). The failure to close below the support might increase that levels significance as support going forward.
Although the share is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Buying might speed up should prices move above the close-by swing high at 48.49 where further buy stops could get triggered. Selling might accelerate should prices move below the nearby swing low at 47.55 where further sell stops could get activated. With prices trading close to this year's low at 46.74, downside momentum might speed up should WFC break out to new lows for the year.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for Wells Fargo. Out of 734 times, WFC closed higher 53.41% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 56.68% with an average market move of 0.35%.