In today's stock of the day, let's focus on Wells Fargo, which is currently under pressure and exhibiting signs of a broader bearish trend. The technical setup is quite clear: the chart reveals a large head and shoulders pattern, a classic bearish formation, marked here with red highlights. This pattern has already been activated with a break below the orange neckline, signaling a valid sell trigger.
Despite this negative outlook, there remains one last line of defense for the buyers—a purple uptrend line, which has been guiding higher lows since 2023. For now, the price is still above this trendline, offering bulls a glimmer of hope that the uptrend might hold.
So, how to approach this setup?
If the price closes a day below the purple uptrend line, it would confirm a continuation of the bearish trend and generate a strong signal to sell. On the flip side, if buyers manage to reclaim the neckline, pushing the price back above the orange resistance, it would negate the bearish pattern and offer a signal to buy, hinting at a potential recovery.
However, considering the current momentum and the breakdown already in place, the bearish scenario appears slightly more likely at this point.