During Thursday’s Mad Money program Jim Cramer noted that Wells Fargo (WFC) could be the biggest winner after it passes the latest round of government stress tests. He told viewers to view weakness as a buying opportunity because the rally may have only just begun.
Let’s check out the charts.
In this daily bar chart of WFC, below, we can see that the shares are quickly recovering after a decline in the first half of June. Prices are back above the rising 50-day moving average line. The slower-to-react 200-day moving average line intersects around $34.
The On-Balance-Volume (OBV) line has maintained a strong uptrend from late October and confirms and supports the gains in the stock. The Moving Average Convergence Divergence (MACD) oscillator is ready to cross to the upside for a cover shorts buy signal.
In the weekly Japanese candlestick chart of WFC, below, we can see a generally positive-looking picture. Prices are in an uptrend above the rising 40-week moving average line.
The weekly OBV line has been rising since June of 2020. The MACD oscillator is just crossing to the downside for a take profit sell signal.
In this daily Point and Figure chart of WFC, below, we can see a potential upside price target in the $60 area.
Bottom-line strategy: It looks like we have a low-risk buying opportunity on WFC. Traders could go long WFC here and risk a close below the recent low. Our initial price target is $60.
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