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 bouncing off a bottom near the 61.8% retracement of the move up from the April low to the top at the beginning of the year. It has a RSI rising in the bearish zone out of oversold conditions with a MACD negative but crossing up. There is resistance at 78 and 81 then 84.50 and 86.25 before 87.50 and 90.50. Support lower is at 76.50 and 73.75. Short interest is low under 1%. The stock pays a dividend with an annual yield of 2.32% and has traded ex-dividend since February 6th.

The company is expected to report earnings next on April 14th before the open. The April options chain shows open interest biggest at the 85 and 70 put strikes, and at 82.50 and 85 on the call side. In the May chain open interest is biggest at the 80 and 65 put strikes , but spread between 77.50 and 87.50 on the call side. Finally in the June chain open interest is focused at the 75 put strike, and biggest at the 90 call strike, then 77.50.

Wells Fargo, Ticker: $WFC

Trade Idea 1: Buy the stock on a move over 78 with a stop at 74.

Trade Idea 2: Buy the stock on a move over 78 and add an April 75/70 Put Spread ($1.24) while selling the May 87.50 Calls (96 cents).

Trade Idea 3: Buy the April/May 85 Call Calendar (95 cents) while selling the April 70 Puts ($1.09).

Trade Idea 4: Buy the June 67.50/80/90 Call SPread Risk Reversal ($1.28).

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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 with the March FOMC meeting and Quadruple Witching in the books, saw equity markets take a turn for the worse ending at 6 month lows and below their long term moving averages.

Elsewhere, look for Gold to continue its pullback in the long term uptrend while Crude Oil churns around $100 per barrel. The US Dollar Index looks to continue to press on resistance in consolidation while US Treasuries bleed to the downside at 6 month lows. The Shanghai Composite looks to continue a short term downtrend while Emerging Markets pullback in their uptrend.

The Volatility Index looks to continue in elevated territory putting pressure on equities. The charts of the SPY and the QQQ remain strong on the longer timeframe but with some weakening showing up while the IWM is starting to roll lower, a threat to its uptrend. On the shorter timeframe the SPY and the QQQ joining the IWM in a short term downtrend. 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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