Reversal from Support for Wells Fargo & Co (NYSE: WFC) Says Market Timer Frank Kollar

July 17, 2008 (FinancialWire) (By Frank Kollar)

Shares of Wells Fargo & Co (NYSE: WFC) jumped to a huge gain on Wednesday July 16 after the company announced better than expected earnings and also raised their dividend, even though they too have rising loan-loss provisions.

Undoubtedly the raise in dividend, by 10%, was a statement by the bank to ensure shareholders and certainly it was well received with a 32% gain in share prices for the day.

But the chart also tells an important story and chartists reacted to a buy signal that was issued at the close, the day before today’s big gain.

In Monday’s decline, share prices closed right at the Fib 127.2% support level. That alerted traders to watch for confirmation of a possible bottom in Wells Fargo’s decline. On Tuesday, while the rest of the stock market took another hit, Wells Fargo importantly held at support, after lower intra-day losses were erased, and then closed with a slight gain.

That was the buy signal for Fib traders and they jumper on board today. The earnings report and raise in dividend announcements were gravy. Look for higher highs in coming days with prices reaching at least $29.17 a share. A close above $29.17 will forecast an even higher target

Kollar is editor and chief analyst at FibTimer.com (http://www.fibtimer.com) which offers market timing strategies for S&P and Nasdaq index fund traders, as well as bond, gold, small cap, sector, ETF and stock trading strategies.

Kollar’s research has shown that the financial markets are in tradable trends approximately 80 percent of the time. FibTimer strategies define trends and trade them in both advancing and declining markets. Caring nothing about what newscasters say or what the latest economic indicator predicts, trends are where the profits are, and that is where FibTimer is.

Go to previous Press Releases & Trading Notes.