WFC surges, gaining $0.83 (3.34%) within a single day on high volume
Wells Fargo & Company (WFC) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 5th day in a row, WFC ended Wednesday at 25.71 surging $0.83 (3.34%) on high volume, notably outperforming the S&P 500 (-0.46%). This is the biggest single-day gain in over three weeks. Today's close at 25.71 marks the highest recorded closing price since July 29th. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Tuesday's high at 25.04, the stock confirmed its breakout through the previous session high after trading up to $0.96 above it intraday.
Daily Candlestick Chart (WFC as at Sep 16, 2020):
Wednesday's trading range has been $1.25 (5.03%), that's far above the last trading month's daily average range of $0.67. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for WFC.
Two candlestick patterns are matching today's price action, the White Candle which is known as bullish pattern and one bearish pattern, the Last Engulfing Top Pattern.
After trading down to 24.75 earlier during the day, Wells Fargo bounced off the key technical support level at 24.82 (S1). The failure to close below the support might increase that levels significance as support going forward. After spiking up to 26.00 during the day, the share found resistance at the 100-day moving average at 25.82.
Crossing above the upper Bollinger Band for the first time since June 8th, prices have shown unusually strong upward momentum in the short-term. This could either indicate a potential buying climax after which prices might head back down towards the mean of the Bollinger Bands at 24.37 or signal the beginning of a strong momentum breakout leading to even higher prices. The last time prices broke out above the upper Bollinger Band on June 3rd, WFC gained 4.82% on the following trading day.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Trading close to July's high at 26.85 we could see further upside momentum if potential buy stops at the level get activated.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Top Pattern" stand out. Its common bearish interpretation has been confirmed for Wells Fargo. Out of 59 times, WFC closed lower 67.80% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 55.93% with an average market move of -0.15%.