Wells Fargo: Multi Year Lows
All companies have felt the recent hardship of COVID-19 which has decimated economy’s over recent months. One of the hardest hit sectors has been the financial industries who have seem dramatic decreases to stock value. Among them is Wells Fargo who currently are sitting at multi year lows. This company seems to be going from problem to problem so we’ll be taking a technical look into what this means and what this might entail for the price moving forward.
The Moving Average Convergence (MACD) is a trend momentum indicator that shows the relationship in this case between the 12 day and 26 day moving averages. It is commonly used as a buy or sell signal and as it is here the MACD has crossed below the signal line indicating a sell signal. If the blue line were to cross again this would inverse the signal into a buy position. We used similar analysis for Beyond Meat when they were priced at 95, they are now at 134.
The Awesome Oscillator is kind of okay i guess. It’s used to measure market momentum and calculates the difference between a 34 period and 5 period simple moving average. The Awesome Oscillator is generally used by analysts to confirm trends or to anticipate possible reversals when the bars cross above and below the 0 line indicating buy and sell signals respectively. As it is in this case, it is reaffirming a sell signal. However it is so important to never base judgments of the first piece of information that comes to hand. As an investor it is so important that we consider all the facts before making a decision because that’s the only way we can ever be sure we can make the right one. We spend great amounts of time investigating companies to help support ideas such as analysis on Blackberry and even Corn!
The Ultimate Oscillator tries to be very true to its name and is a technical analysis tool used to measure momentum across three different time frames. Simply put it is a way to measure buying pressure. When buying pressure is strong the ultimate oscillator rises and conversely falls when buying pressure is weak. The graph is formulated from the 3 different time frames giving the highest weighting to the short time frame but still factors in longer time frame. This is all done in an effort to minimise the affects of false positives seen in other oscillators that only use one time frame. To get some insights from this indicator we’ll be looking at the peaks and troughs of the graph, we can see that at the end of April and start of May there are two overbought peaks which shows a bearish diversion signal as the ultimate oscillator forms a lower high as the price of the commodity forges a higher high. Put simply its a sell signal.