Wells Fargo & Co. (WFC) is due to report its latest earnings this week. Let's visit the charts and indicators to see what clues we might be able to glean.
In this daily bar chart of WFC, below, we can see that owning shares of WFC the past 12 months has not been a rewarding experience. Prices peaked in August and lost a lot of ground until a V-like bottom in late December. WFC rebounded until late March and stopped short of the declining 200-day moving average line. Prices dribbled lower from March to early June, which could be considered a retest of the December nadir. WFC has come off its June low and is above the bottoming 50-day moving average line but still below the bearish 200-day line.
The daily On-Balance-Volume (OBV) line has been flat to declining from December and does not suggest that investors have become more aggressive buyers. The trend-following Moving Average Convergence Divergence (MACD) oscillator is just above the zero line but looks like it soon could cross to the downside again for a bearish signal.
In this weekly bar chart of WFC, below, we can see that the $46-$43 area has provided some chart support over the past three years. A close below this area would be bearish should it happen. The declining 40-week moving average line has acted as resistance the past year. The weekly OBV line shows a rise from December, which suggests that buyers have been more aggressive. The MACD oscillator gave a cover shorts buy signal in June but is still well below the zero line for an outright go long signal.
In this Point and Figure chart of WFC, below, we can see a potential upside price target of $53.
Bottom line strategy: WFC is showing us a few positive signs on the charts, but the major trend is still bearish. Because the declining 200-day moving average line has been successful in stopping rallies the past year I would wait until it is broken on the upside before probing the long side.