WFC closes lower for the 2nd day in a row
Wells Fargo & Company (WFC) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, WFC ended the month -5.23% lower at 24.26 after losing $0.39 (-1.58%) today, strongly underperforming the S&P 500 (0.77%).
Daily Candlestick Chart (WFC as at Jul 31, 2020):
Friday's trading range has been $0.58 (2.37%), that's below the last trading month's daily average range of $0.87. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for WFC.
Prices broke below the key technical support level at 24.40 (now R1), which is likely to act as resistance going forward. The last time this happened on July 7th, WFC actually gained 0.37% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
With prices trading close to this year's low at 22.00, downside momentum might speed up should the share break out to new lows for the year. As prices are trading close to July's low at 23.33, downside momentum could accelerate should the market mark new lows for the month.
Among the two market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Wells Fargo. Out of 312 times, WFC closed higher 51.92% 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 61.22% with an average market move of 0.50%.