Earnings Play: Wells Fargo

Look for a new short-term downtrend.

Downtrend 6

On Wednesday, before market, Wells Fargo (WFC), one of the big 5 banks in the U.S., is expected to release third quarter EPS of $0.45 compared to $1.03 last year. The company's expected move based on front-month options is 4.2%. The last time the company reported earnings the stock dropped 4.6%.

Technically speaking, on a daily chart, Wells Fargo's stock price has been consolidating after a large drop in the first quarter of 2020. Since late-June price has been holding under its 26.85 resistance level and chopping around. In late-September price made its lowest low since mid-July and has not been able to got above its last peak of 26.00. Price is above its 20-day and 50-day simple moving average (SMA), but far below its 200-day SMA. Price will likely lose its short-term bullish momentum and fade towards the 22.00 support level. If price does not find support at 22.00, it could fall all the way down to 19.25 support level, a price last seen in 2009. However, if price can get above its last peak of 26.00, then price could rise to 26.85. If price can manage to breakout above 26.85, then the stock could potentially reach for its 29.65 resistance level.     

Source: GAIN Capital, TradingView

Build your confidence risk free

More from Earnings

Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.