During the pandemic, the financial sector was one of the worst performers in the stock market, falling by about 12 percent year on year, compared to 11 percent growth in the S&P 500. And there are weighty reasons for that: Investors are concerned about what unemployment and low-interest rates could mean for the banks. Wells Fargo was one of the lagging companies in this sector. Since it does not have a significant investment banking business that would help offset losses in consumer lending (investment banking tends to work better in volatile markets), it is more susceptible to the effects of the pandemic than other major banks. But this has been happening for a long time, a few years before the pandemic, as numerous scandals with Wells Fargo have tarnished its reputation and forced many investors to give up stocks.
Our Analysis:
While the price is above 22.50, follow the recommendations below:
- Time frame: D1
- Recommendation: long position
- Entry point: 24.19
- Take Profit 1: 26.50
- Take Profit 2: 27.60
Alternative scenario:
If the level 22.50 is broken-down, follow the recommendations below:
- Time frame: D1
- Recommendation: short position
- Entry point: 22.50
- Take Profit 1: 20.70
- Take Profit 2: 19.60
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