If there is one company that is being punished lately, it is Wells Fargo (WFC). The bank was plagued last year with a massive consumer scandal that caused investor panic and dissension and the eventual removal of the CEO. It’s been a tough road back, but the stock recently peaked at all-time highs. It has since come under severe pressure but support has held steady at the 200 moving average – and that may be its saving grace.
Volume popped last week after the stock got pounded on earnings. Like moths to a flame, the stock bolted to the 200 ma to test support. A successful bounce on decent turnover happened again on Monday. Make no mistake, the chart is still in a severe downtrend but it is now in deviation. We could see a sharp move upward to resistance, around the 56 area. Above that level the chart turns bullish, and new highs could be coming.
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