Wells Fargo is in breakout mode today. Shares are up 2.5% as it continues to lift off solid footing(50D MAV). This move is piercing a key overhead trendline that links the previous four monthly highs. We expect WFC to extend the November rally. Initial target is the declining 200D($28.00).
WFC went on to hit new 2020 lows in May and did so again in late October. The BKX(KBW Bank Sector Index), which WFC is a top five holding(7%), did not reach a new low since the March bottom. The BKX is heading for its best weekly close since late February.
WFC has been tracing out a huge MACD divergence since mid May.
A close back below $23.00 would be a clear warning sign that more basing is ahead.