4 Trade Ideas for Wells Fargo: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

Wells Fargo, $WFC, comes into the week pressing against resistance and the 20 day SMA after a shallow pullback from an all-time high. The Bollinger Bands® have squeezed, often a precursor to a big move. The RSI is rising in the bullish zone with the MACD leveling after a reset lower in positive territory. There is resistance at 80.75 and 81.50 then 84. Support lower is at 78.50 and 77.75 then 76.50. Short interest is low at 1.1%. The stock pays a dividend with an annual yield of 1.98% and has traded ex-dividend since May 9th.

The company is expected to report earnings next on October 14th. The August options chain shows biggest open interest at the 80 then 75 and 72.50 put strikes and at the 80 then 85 call strikes. In the September chain open interest is biggest at the 75 put and builds from the 80 strike to a peak at the 90 strike on the call side. Finally, the October chain has biggest open interest at the 80 and 65 put strikes, and it is biggest at the 85 call strike.

Wells Fargo, Ticker: $WFC

Trade Idea 1: Buy the stock on a move over 80.75 with a stop at 78.

Trade Idea 2: Buy the stock on a move over 80.75 and add an August 80/75 Put Spread ($1.30) while selling the October 90 Call (95 cents).

Trade Idea 3: Buy the August/September 85 Call Calendar (88 cents) while selling the September 75 Put ($1.04).

Trade Idea 4: Buy the October 72.50/82.50/87.50 Call Spread Risk Reversal (60 cents).

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After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which heading into the second week of earnings season, saw equity markets continued to show strength, holding and making new highs.

Elsewhere, look for Gold to continue to consolidate in its uptrend while Crude Oil drifts in consolidation. The US Dollar Index continues short term move to the downside at 3 year lows while US Treasuries consolidate in their downtrend. The Shanghai Composite looks to consolidate the mini break higher while Emerging Markets continue their break to the upside.

The Volatility Index looks to continue in the normal range making life easier for equity markets to the upside. The charts of the SPY and QQQ are showing strength on both timeframes as they continue to print new all-time highs. The IWM continues to lag the moves in the SPY and QQQ in price but is looking stronger as it moves higher as well. Use this information as you prepare for the coming week and trad’em well

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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