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US Equities Technical: Watch 41.50 potential upside trigger for Wells Fargo (WFC)

Wall Street

Medium-term technical analysis (1 to 3 months)

(click to enlarge chart)

(click to enlarge chart)

Time-stamped: 18 Jul 2022 as at 12:20pm SGT

Source: CMC Markets & TradingView

Integrated technical analysis (graphical, momentum, Elliot Wave/fractals) suggests that its major downtrend phase from 10 February 2022 52-week high of 60.30 that recorded a plunge of -39.4% to print an intraday low of 36.54 on 16 June 2022 may have reached an inflection zone for a potential corrective rebound to put a pause on its current major 5-month bearish impulsive down move sequence.

Key Levels (1-3 months/WFC)

Intermediate support: 37.15

Pivot (key support): 33.60

Resistances: 41.50 (trigger), 46.10 & 41.50

Next support: 25.70

Directional Bias (1-3 months/WFC)

Watch the 33.60 key medium-term pivotal support and a break above 41.50 is likely to trigger a potential one to three months of corrective rebound towards the next resistances at 46.10 and 48.90. An important point to note is there are still no clear technical elements to suggest that the price actions of WFC are undergoing a major bottoming configuration to kickstart a major new bullish impulsive up move sequence.

On the flip side, a break with a daily close below 33.60 invalidates the corrective rebound scenario for another round of decline towards the next support at 25.70

Key elements (WFC)

  • The 33.60 key medium-term pivotal support is defined by the former major swing highs of 9 April 2020/5 June 2020 and a confluence cluster of Fibonacci retracement/expansion levels.
  • Among the 7 major US financial firms, WFC is ranked at the top with a positive adjusted combined weightage average momentum score of 1.24 based on closing prices as of 14 July 2022.  
  • The medium-term resistance zone of 46.10/48.90 is defined by the 200-day moving average, congestion area from 7 March 2022/1 June 2022, and the 38.2%/50% Fibonacci retracement of the major downtrend phase from 10 February 2022 high to 16 June 2022 low. 

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