Wells Fargo Stock Surges 3.10% As Technical Indicators Flash Bullish Signals

Candlestick Theory
Wells Fargo's recent price action reveals notable candlestick patterns. The June 13 bearish engulfing pattern preceded a 2.23% decline, establishing resistance near $73.80. Subsequent bullish reversal signals include the June 17 hammer ($72.30 low) and the June 18 strong white candle (+3.10% close at $74.75), which breached the $73.80 resistance. Immediate support resides near $72.50 (June 17 close), with major support at $71.93 (June 13 low). Resistance now consolidates at $75.13–$75.72, aligning with the May 20–21 highs. The bullish June 18 close suggests short-term upside momentum, contingent on holding above $73.80.
Moving Average Theory
The moving averages depict a developing bullish structure. The 50-day SMA (approx. $71.50) has consistently underpinned prices since May, while the 100-day SMA ($70.80) and 200-day SMA ($67.50) slope upward, confirming the longer-term uptrend. Crucially, the June 18 close at $74.75 sits above all three key averages. Most significantly, the 50-day crossed above the 200-day in early May (Golden Cross), a historically reliable bullish signal. The convergence of price action above ascending SMAs indicates sustained upward trajectory bias absent a close below $71.50.
MACD & KDJ Indicators
MACD (12,26,9) shows bullish alignment: the June 18 MACD line at +0.85 remains above its signal line (+0.60), with histogram bars expanding upward—a momentum confirmation signal. KDJ oscillators reinforce this; K-line (78) and D-line (75) are rising in the upper-mid zone, avoiding overbought (>80) conditions. Both indicators lack bearish divergence, suggesting near-term continuation potential. However, MACD’s moderate positive reading implies momentum isn’t yet extreme, leaving room for further upside before overbought risks emerge.
Bollinger Bands
Bollinger Bands (20-day, 2σ) highlight tightening volatility and a nascent breakout. The June 6–17 period saw bands contract to a 3-week narrowest width (72.30–74.20), indicating volatility compression. The June 18 close at $74.75 broke above the upper band ($74.20), a bullish breakout signal typically preceding accelerated moves. This expands the bands and targets the next resistance zone near $76.50 (May 15–16 highs). Sustained closes above $74.20 would validate directional strength.
Volume-Price Relationship
Volume patterns confirm recent bullish momentum. The June 18 rally occurred on 17.5 million shares—28% above the 30-day average—signifying strong participation. Notably, the April 9 surge (+6.85% on 42.7M shares) and June 4 downdraft (-0.36% on 29.6M shares) demonstrate volume’s validation of directional moves. Current accumulation is supported by above-average volume on up days (June 16, June 18) versus below-average volume during pullbacks (June 17), reinforcing buyer dominance.
Relative Strength Index (RSI)
RSI(14) at 67.50 (calculated using average gains/losses) approaches overbought territory (>70) but remains within bullish momentum parameters. The indicator bottomed at 42 on June 7 during the $72.50 test, avoiding oversold conditions. Current readings lack negative divergence, as RSI ascends alongside price. However, a surge above 70 would warrant caution for short-term exhaustion near $76.50–$77.00 resistance. Probabilistically, RSI supports continuation until overbought signals emerge.
Fibonacci Retracement
Applying Fib retracement to the March–April uptrend (swing low: $56.96 on April 4; swing high: $74.88 on May 12) reveals key levels. The 61.8% retracement ($73.55) now acts as support, aligning with the June 13 low of $71.93 (minor undershoot). The 50% level ($71.80) reinforced the June 17 bounce. Current price action above the 61.8% Fib targets the 78.6% level at $76.85—confluent with the May peak resistance. This Fibonacci grid suggests $76.85 is the immediate technical objective.
Confluence and Divergence Observations
Significant confluence exists at $76.50–$76.85, merging Bollinger Band expansion targets, Fibonacci resistance, and swing highs from May. The moving average stack (price > 50/100/200-day SMAs) and MACD/KDJ alignment support the bullish bias. No material divergences are evident, though RSI nearing 70 and proximity to the $76.50–$76.85 resistance zone imply limited near-term upside scope. A decisive close above $76.85 would signal breakout validation, while failure to hold $73.55 (61.8% Fib) may trigger profit-taking toward $71.50 support.