The fattest cat on Wall St. seems to be flying a bit under the radar these days. Wells Fargo & Co (NYSE:WFC) has been quietly rising to become the biggest banks in the world by market cap during 2014. Surprised? Well check out these stats...
Considered one of the most conservative banks in the United States, Wells Fargo & Co has moved up from fourth in the rankings of world's largest banks by market cap in April of 2013, to number one during 2014. The market cap of Wells Fargo & Co is now almost three and a half times the market cap value of the all mighty, Goldman Sachs Group Inc (NYSE:GS).
Wells Fargo & Co has had an amazing come back from the Financial Crisis of 2007; it is now number one, with more than fifty billion separating it from the number two, JPMorgan Chase & Co. (NYSE:JPM).
Recently, the media has started to pick up on this and the hype surrounding the name increases by the day. However, as traders all we are concerned with is should we be buying or selling the equity now. More importantly, where will Wells Fargo & Co be trading a few months or even a year from now.
Perhaps you missed the move WFC has had, now you are considering buying it. Well, lets look to the chart to tell us where the best place to enter this trade would be...
By doing some simple trend line analysis, we can see that Wells Fargo & Co has come into some major historical resistance as noted in the monthly chart above. Pretty much anyone looking at this chart would agree that this equity is extremely extended and should not be bought at current prices. In fact if Wells Fargo & Co closes at or below $51.00 by the end of June, it could be considered as a potential short candidate depending on other technical factors in consideration at that time.
The price level for those interested in buying and holding Wells Fargo & Co for a longer term move will be $41.18. If the stock should fall into this level without any consolidation above, it will represent a natural correction level, and buying opportunity. Remember that only a few years ago this equity traded as low as $7.80, you do not want to be the one holding the bag as institutions slowly begin to take their profits.
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by Kiliam Lopez