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Wed. 1 Sep 2021, 2:38pm ETBenzinga
In: Long Ideas, News, Short Ideas, Rumors, Technicals, Trading Ideas

Wells Fargo & Co. (NYSE:WFC) shares are trading lower Wednesday on continued weakness after Bloomberg reported the company could see regulatory action over the speed of its restitution payments.

The stock looks to be dipping below a key technical level Wednesday. Wells Fargo was down 4.9% to $43.44 at time of publication.

Wells Fargo Daily Chart Analysis

  • The stock dipped lower and looks to have broken below the higher low trendline in what technical traders call an ascending triangle pattern.
  • The $52 price level has held as resistance multiple times in the past and may continue to act as resistance in the future. The higher low trendline is somewhere the stock was holding as support, but could change now as the stock fell below the level.
  • The stock trades below the 50-day moving average (green), but above the 200-day moving average (blue), indicating the stock is likely facing a period of consolidation.
  • The 50-day moving average may hold as an area of resistance, while the 200-day moving average may act as an area of resistance.
  • The Relative Strength Index (RSI) made a large dip the past few days and now sits at 34. This puts the RSI near the oversold area where there is much more selling pressure than buying pressure.

What’s Next For Wells Fargo?

Bullish traders are looking to see the stock be able to cross back above the higher low trendline and continue to hold above it. Bulls would then like to see the stock break out of the pattern and push above resistance.

Bearish traders would like to see the stock stay below the higher low trendline and begin to hold the level as resistance. This could hint that the stock is ready to see a push lower.