Market News & Analysis
Featured Trade (US Stock): Wells Fargo reacted off below key resistance
Kelvin Wong February 7, 2019 7:11 PM
Medium-term technical outlook (1-3 weeks) on Wells Fargo (WFC)
Click to enlarge charts
Key technical elements
- The on-going 17% rebound from its recent 26 Dec 2018 low of 43.02 has started to react off right below a key medium-term resistance at 51.25. In the past 2 weeks since 25 Jan 2019, the share price of WFC has started to slip by 3.6% to print a low of 48.71 on 04 Feb 2019.
- The 51.25 key resistance is defined by the former neckline support of a major bearish “Head & Shoulders” configuration that was broken to the downside on 06 Dec 2018, 61.8% Fibonacci retracement of the recent steep decline from 03 Dec 2018 high to 26 Dec 2018 low and a medium-term descending trendline from 27 Aug 2018 high (see daily chart).
- Momentum indicators are not supporting a “bottoming” process despite its recent swift up move seen in the price action. The weekly RSI oscillator has not displayed a bullish divergence signal and the daily RSI oscillator has traced out a bearish divergence signal as price actions continue to push higher from 18 Jan to 25 Jan 2019.
- The next significant medium-term supports rest at 47.00 (swing low areas of 08/15 Jan 2019 & 50% Fibonacci retracement of the rebound from 26 Dec 2018 low to 25 Jan 2019 high) and 44.70/43.02 (former major swing high area of Sep 2008 & 26 Dec 2018 low).
Key Levels (1 to 3 weeks)
Immediate resistance: 50.40
Pivot (key resistance): 51.25
Supports: 47.00 & 44.70/43.02
Next resistance: 55.00
WFC may kick start another leg of impulsive down move towards the 47.00 support in the first step if the 51.25 key medium-term pivotal resistance is not surpassed. A break below 47.00 sees a further potential decline to retest 44.70/43.02 next.
On the other hand, a clearance above 51.25 opens up scope for a further corrective squeeze up towards the next resistance at 55.00 (the pull-back resistance of the former long-term secular ascending channel support from Mar 2009 & range top of 17 Oct/03 Dec 2018).
Charts are from eSignal
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.
Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.