WFC closes higher for the 3rd day in a row
Wells Fargo & Company (WFC) Technical Analysis Report for Apr 08, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, WFC finished Wednesday at 30.28 gaining $1.51 (5.25%), strongly outperforming the S&P 500 (3.41%). Trading up to $0.66 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (WFC as at Apr 08, 2020):
Wednesday's trading range has been $1.80 (6.13%), that's below the last trading month's daily average range of $2.33. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently significantly lower than usual for WFC.
One bullish candlestick pattern matches today's price action, the White Candle.
After trading down to 28.68 earlier during the day, Wells Fargo bounced off the key technical support level at 29.11 (S1). The failure to close below the support could increase that levels importance as support going forward. After having been unable to move lower than 28.71 in the prior session, the stock found buyers again around the same price level today at 28.68. The last time this happened on April 2nd, WFC actually lost -3.64% on the following trading day.
Although the share is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could speed up should prices move above the close-by swing high at 30.78 where further buy stops might get triggered.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous High" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Wells Fargo. Out of 575 times, WFC closed higher 50.26% 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 56.52% with an average market move of 0.28%.