Wells Fargo Surges 3.51% as Bullish Reversal Pattern Targets $89.35 Resistance Cluster

Wells Fargo (WFC) has surged 3.51% in the most recent session, marking its second consecutive day of gains with a cumulative rise of 4.63%. This price action aligns with a potential bullish reversal pattern, particularly given the prior consolidation around the $82.40 support level observed in late November. The recent rally has pushed the stock toward a key resistance cluster near $89.35, suggesting a test of this area could confirm or invalidate the upward momentum. Candlestick Theory highlights the importance of this resistance level, as a breakout above $89.35 with strong volume may indicate a shift in sentiment, while a pullback to the $85.00–$86.00 range could establish a new support zone.
Moving Average Theory reveals a constructive alignment: the 50-day MA (approximately $84.50) and 200-day MA (around $77.50) are in a bullish "golden cross" configuration, with the price comfortably above both. This suggests medium-term strength, though traders should monitor if the 200-day MA becomes a critical support level. The 100-day MA (~$83.00) acts as an intermediate filter, and a sustained close above it would reinforce the uptrend.
MACD & KDJ Indicators show diverging signals. The MACD histogram has expanded in recent sessions, reflecting growing momentum, while the KDJ oscillator (with %K at ~80 and %D at ~75) suggests overbought conditions. However, the %K line remains above %D, indicating the short-term trend remains intact. A bearish crossover in the KDJ or a MACD line crossing below the signal line may signal a near-term correction.
Bollinger Bands have recently widened following a period of contraction in late November, indicating a potential breakout phase. The current price near the upper band (~$89.35) suggests elevated volatility, and a sustained move above this level could trigger further expansion of the bands. Conversely, a retest of the lower band (~$85.00) would likely act as a support zone.
Volume-Price Relationship supports the recent rally, with trading volume spiking in the past two sessions (averaging ~14 million shares daily). This validates the price action’s legitimacy, though a decoupling between volume and price gains (e.g., volume tapering while the price rises) could signal weakening conviction.
RSI has climbed to ~68, approaching overbought territory (70). While this may indicate a potential pullback, the RSI’s trajectory remains upward, suggesting the uptrend could persist. A close above 70 would heighten caution, but historical context shows RSI can remain overbought during strong trends.
Fibonacci Retracement levels derived from the November low ($82.40) to the recent high ($89.35) identify critical zones: the 38.2% retracement (~$86.50) and 50% level (~$85.80) are immediate support areas. A breakdown below $85.00 (61.8% retracement) would invalidate the bullish case and target the prior consolidation range around $82.40.
Confluence points include the alignment of the 50-day MA, Bollinger Bands, and Fibonacci retracement levels above $85.00, which could reinforce the stock’s ability to hold its current gains. However, divergences between the overbought RSI and KDJ oscillator suggest caution. The key risk lies in a failure to break above $89.35, which could trigger a retest of the $85.00–$86.00 range and potentially lead to a deeper pullback if volume wanes.