July 17 Chart of the Day - Wells Fargo
Wells Fargo (WFC) is one of the largest banks in the US. They reported earnings last week that surpassed Wall Street's estimates that initially popped the stock price up and over $45 per share.
From a price action technical analysis perspective the news moved price into some potential overhead resistance in the form of support/resistance and Fibonacci structure that initiated some selling pressure.
But the question remains is that the bears stepping in or just the bulls taking some profits off the table because since last quarter's earnings the price has moved up from $35.
The higher time frame monthly chart as seen below leaves room to the upside for price to run up to the $50-$55 zone before meeting more overhead resistance.
However, the weekly chart reveals a bear flag that has formed over the past 3 months that could provide even more selling pressure potentially back down to the $40 or below area.
Regardless of the future direction between these highlighted levels it would all be considered "normal" price action movement.
We are neither bulls or bears of this or any chart. We consider ourselves traders and define levels of interest in both directions to develop associated trade plans.
So what's next?
Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.
- Support/Resistance
- Trend
- Fibonacci
- Supply/Demand Zones,
- Change Control Zones
Take a look at the charts and let us know what you think.
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