Wells Fargo stock has just retreated onto a historically bullish trendline
Wells Fargo & Co (NYSE: WFC) Has already had a stellar 2021, despite the fact that stocks were marginally lower recently, up 0.4% to $ 41.82 – still near their highest level in over a year. Yesterday, the company reported first quarter earnings and sales that exceeded Wall Street estimates and joined a growing number of companies Bank stocks to do this and score a ton of bull marks. Equity saw an infrequent increase after profit, even though it had previously dropped to $ 39. However, that decline also brought security close to a historically bullish trendline that could propel the WFC even higher in the coming weeks.
In particular, Wells Fargo stock was only within one standard deviation of its 40-day moving average after spending much time above that trendline. According to Schaeffer’s senior quantitative analyst Rocky White, three similar signals have occurred in the past three years. 67% of the time, the security returned a positive return one month later, which translates into an average gain of 6.2% for that period. From today’s perspective, a move of similar magnitude would push the WFC above the $ 44 mark – a level the stock hasn’t seen since March 2020.
No fewer than 11 brokers have agreed to price target increases. The highest was issued by Citigroup, which raised its price target from $ 37 to $ 50. The majority of analysts were bullish today, although there is still plenty of room for additional upgrades as eight of the 18 in coverage sports have a lukewarm “hold” rating.
Now might be a good time to weigh WFC’s next move with options. The Schaeffer’s Volatility Index (SVI) of 28% is the lowest percentile of all other values of the past year. This suggests that options players are currently pricing in lower than usual volatility expectations.
After all, that’s security Schaeffer’s Volatility Scorecard (SVS) is at a relatively high 72 out of 100, indicating that the stock has exceeded volatility expectations over the past 12 months – a boon for option buyers.