Wells Fargo is a SHORT

Discussion in 'Stocks' started by alexandercho, Oct 8, 2009.

  1. Wells Fargo is not going to earn as much money as it did when it was at it's 52-week high. No matter how good the earning reports they won't be good enough to overshadow how much it made in 06 and 07. So how is it going to reach the price it was at in 06 and 07?

    Second the stock has moved up to $29 to fast and it has hit the same resistance level for the third time. The bad news is, is that it doesn't have nearly enough juice to support it's climb above $29.

    Fast Stochastic shows that it's over bought and it's not even breaking it's previous resistance level.

    That's BAD news for Bulls and GOOD news for Bears.

    Happy trading but I think the resistance at $30 level is their to stay for a long time.
  2. GOOD looks like I was right the market closed negative on the WFC. Sounds fine to me. Bears make money Bulls make money but hogs get slaughtered.

    Happy trading ladies and gentlemen.
  3. BartS


    Looks like it should fail - but beware of the prefabricated phony earnings that may send this thing over the top - this market is so overbough right now it's not even funny - the leaders AAPL and GS struggled today but every time someone started calling for a top we broke through new levels....

    I have a short bias on WFC at these levels and I trade the thing - the first temptation is to short the hell out of it close to 29.50 - but if it closes above 30.00 it's a screaming buy and the bull uniform comes out of the closet - squeezing the living shit out of all the bear crowd.... :D
  4. Whoa a screaming buy when it goes above $30?

    HELL NO are you serious? 75% of breaks above major resistance levels are fakes. If you put in an appropriate 3:1 risk ratio on your trades and short at each break above a resistance you only need to win 4/10 times to make a profit. The odds are in your favor judging by the average 7.5/10 ratio of successful shorts if you go short at every major resistance level in a channel.

    We are trading in a channel and my guess is when those earning reports come out they're not going to surprise nobody. When an Excellent company comes home with an A+ no one gives a damn they just want to buy the anticipation and dump the news.

    End of story, this stock is not going to get anywhere near $35 until it's EPS is better than it was in 2006. If any of you bulls buy the stock near the $30 level your SCREWED.

    I'll leave it at that. Happy trading ladies and gentlemen.
  5. A double doji, seems interesting. The bulls seem to be afraid of pushing this market any higher. Volume is down so their isn't very much demand. If your in this trade I would leave it immediately. Do yourself a favor and buy something that's actually undervalued = Bank of America.
  6. This stock is experiencing resistance on the upper deviation on the 3-year Bollinger Band it's also formed a rising star on the 3-year chart. Stocks are within a bollinger band 97.5% of the time. This stock is going to reverse. The EPS will not be equivalent to what it was 2 years ago.

    I'm calling this the top. If your in this stock bail out now and find a better entry. If you want to short make sure you have an appropriate stop loss order in place.
  7. I'll take the opposite side of your trade.
  8. i shorted it today :)
  9. Have fun buying something for more than it really is.
  10. BartS


    I only trade intraday - so it doesn't really matter....
    But I have to admit that I had a bias so short on this that I didn't take the breakout today and didn't even put a single trade in it today - and even with the market doing absolutely nothing this thing blew through the top of the range.

    Interestingly enough when the market sold off WFC stayed put....nothing not even a pullback - and then blew through 30.

    I was watching the level 2 when it got to 30 - size on the offer went from a 30-70 per ecn to 5000-6000...like mentioned in the original post, lots of stops got smoked at 30.

    Now just have to wait on the same guys that were short to start buying if this holds 30 tomorrow....and the rest of the bears will get squeezed...

    Now, I'm not saying that it will go to 40 and that it should be there - because it shouldn't...But trading something based on what it should do based on fundamentals is always a recipe for disaster...
    #10     Oct 13, 2009