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

More from Earnings

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.