Stock of the day: Wells Fargo

In today’s Stock of the Day, let’s take a look at Wells Fargo, which has recently cancelled a previous sell signal and is now setting up for a potential bullish move.

On the chart, you can clearly see a large Head and Shoulders pattern with a red neckline. We initially broke below this neckline, briefly triggering a sell signal. However, that breakout turned out to be a false breakout, as the price quickly returned back above the neckline. This false breakout is marked with blue color on the chart, and it’s a significant bullish factor.

Adding to the positive sentiment, Wells Fargo also climbed back above the yellow horizontal resistance, which had previously acted as an important barrier. So now, the price being above both the neckline and the yellow resistance strengthens the bullish outlook.

The last step needed for a proper, full confirmation of a buy signal is a breakout above the green downtrend line. If the price closes a daily candle above this green resistance, it will activate a strong signal to go long and likely initiate a new bullish phase.

For now, the bias is turning more positive, but traders should wait for the final confirmation.

Source: https://www.axiory.com/analytics/stock-of-the-day/stock-of-the-day-wells-fargo-2