On the weekly chart of Wells Fargo below, not that each time the stock has popped its head above $34–specifically $34.25–in recent years it has been met with a heavy bout of selling. Indeed, price has memory. However, this time around Wells has not seen heavy supply hit with its recent adventure up to these multi-year levels. In other words, the stock is coming to terms much better this time around with this key resistance level, and the presumption is that much of the supply over the past few years has been worked off, meaning everyone who wanted to sell up here likely has already done so.
I am currently long WFC inside 12631 with some nice cushion on a winning trade, and positioned for a major breakout here in the coming weeks. Should the stock break below $33.50 with heavy selling coming back in I would be compelled to reconsider the position and bull thesis.
One Response to A Different Path Higher for Wells Fargo
Great post Chess, thanks. Interesting picture as well.