Wells Fargo & Co (WFC) is expected to report earnings on Friday April 14 before the market opens. The report will be for the fiscal quarter ending March 2023. Analysts at JP Morgan lowered their price target on WFC and other banks.
Let's check the charts to see if traders are expecting further weakness or are counting on a rebound.
In this daily bar chart of WFC, below, I can see that prices have turned weaker from the middle of February. Prices are trading below the declining 50-day moving average line and the weak 200-day moving average line. The 50-day line just crossed below the 200-day line for what is commonly called a dead or death cross. This is a lagging signal. Trading volume has been heavy the past six weeks.
The On-Balance-Volume (OBV) line has moved up and down with the price action. The Moving Average Convergence Divergence (MACD) is bearish but just crossed to the upside for a cover shorts buy signal.
In this weekly Japanese candlestick chart of WFC, below, I see a mixed to bearish picture at this point in time. Prices are trading below the soft 40-week moving average line. The candles have made a bottom reversal pattern but so far the price action is sideways and not upwards (both outcomes are within the definition of a bottom reversal).
The weekly OBV line has been weak since early 2022. The MACD oscillator is in a bearish alignment below the zero line.
In this daily Point and Figure chart of WFC, below, I can see that the software is projecting a potential downside price target for WFC in the $24 area.
In this weekly Point and Figure chart of WFC, below, I can also see a downside price target of $24.
Bottom line strategy: I have no special knowledge of what WFC will tell shareholders later this week but I tend to feel that the recent trends in the banking industry have not yet run their course.
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