The Wells Fargo Stagecoach Is Finally Kicking Up Some Dust

The bank is making an attractive move higher on the charts.

Banking giant Wells Fargo (WFC) has struggled on the charts and in the press since early 2018, but now the charts are looking more attractive. Let's take a look.

In this daily bar chart of WFC, below, I can see a choppy trading pattern the past twelve months. Prices sank to a new low in March but have recovered starting with a higher low in May. WFC now trades above the rising 50-day moving average line and above the rising 200-day moving average line.

The trading volume has been more active since the middle of March when prices made a low and signals increased investor interest, and maybe a shift in ownership from weak hands to stronger hands - investors with deep pockets and foresight.

The On-Balance-Volume (OBV) line made a low in December and a higher low in March when prices made a lower low - a bullish divergence. The Moving Average Convergence Divergence (MACD) oscillator moved above the zero line in May for an outright buy signal. 

 

In this weekly Japanese candlestick chart of WFC, below, I can see an improving picture. Prices are trading above the 40-week moving average line. The weekly OBV line shows strength. The most recent weekly candle is white (bullish) and upper shadows are not an issue. The MACD oscillator is close to crossing above the zero line for a buy signal.

 

 

In this daily Point and Figure chart of WFC, below, I can see a potential upside price target in the $56 area.

 

 

In this second Point and Figure chart of WFC, below, I used weekly price data to get a target in the $64 area.

 

Bottom line strategy: Traders could go long WFC on a dip towards $45. Risk to $41.50. My price targets for now are $56 and $64, but strength above $64 could be significant.

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