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Update to prior posts:
WFC looks decidedly bearish now.
The breakout from the 49 pivot zone held up reasonably well,
immediately forming a bull flag and rallying through in a thrust bar on the
strongest volume to that point.
Breakout to recent high, there was a roughly 17% rally in
short order.
After a 17% rally from the breakout, one would expect a
pullback.
However, the wedging action and falling volume into the final
10% of the rally, coupled with the increased volume and range expansion bars on
the 2 most recent down days makes it so that the going gets better for the bears
from here.
A break below the 49 pivot would complete an island reversal
on the daily and weekly.
On the Daily, the trend following indicators like ADX and MACD
are reflecting recent weakness in the strength and direction of the recent
trend.
On the weekly, there is a divergence one can pinpoint,
assuming the current weekly bar closes here.
Note that this is a low ATR and low historical volatility
stock relative to those trading 4 letter buzzwords.
In % risk-reward terms, though, the paint dries just as
smoothly.
Gitanshu
PS: For those tracking financials/bonds, the chart (not
attached) of New York Finance Index (NF.X) is also in the process of putting in
a definitive top after a failure breakout to new highs that was well highlighted
in recent media coverage.
Don't know whether Mr. Greenspan speaks with a forked
tongue or not, but this market health indicator sure speaks out loud. I would
expect NYSE breadth to deteriorate from now, since Financials are a huge weight
in thar statistix.
G
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