Wells Fargo is a SHORT

I trade based on fundamentals and technicals. It's at the very top of a 2nd Deviation Bollinger Band on 3 year charts. If we're going to base this trade on 3 years of data, how can we say that the major resistance level right there isn't in tact? How do we give a reasonable explanation for a company trying to break bollingers on 3-years chart(which it failed to do so). Oversold on 3-year Chart Fast Stochastic. Over priced on fundamentals. It's worth as much as it was in 2005 yet it's earnings wont be normalized till 2012.

Mind boggling? I think so, the short term trades might look bullish but within this month this stock will correct itself to reasonable levels based upon earnings and trade within a channel that matches it's current EPS. I believe that Efficient market theory to a certain extent is correct. I believe that stocks eventually trade in a range that is in line with fundamentals. Trading a range is very easy and predictable in Mega Cap stocks like Wells Fargo.

It'll only be a matter of time the market will correct and trade in a range much closer to fundamentals. 2012 is when $35-30 is a feasible channel. My expectations of this channel is $29-26 in all honesty.

Reality will hit wall street soon...
 
I can't blame her for cutting her rating. Some of the high quality names e.g. Goldman Sachs is trading way the heck higher than it should in proportion to EPS.
 
I think you can sell this one at a better price when Goldman beats later this week. I dont see the upside of rushing to hit it now.
 
To be honest I think people are dumping because even if every company beat expectations it still doesn't change the fact that their trading at 1 year highs or they are trading at prices equivalent to where they were in 06. Yet they aren't making as much cash as they were in 06.

I don't need to look at earnings to know that Wells Fargo can't rake in results equivalent to 05-06 so it shouldn't be trading in a range of $30-35

It's not rocket science ladies and gentlemen :)
 
It closed above 30.00 today.
JPM is reporting in the morning - we'll see what happens there as things unfold in the morning...

We may see dow 10K tomorrow - which again makes no sense.

But again, if it makes no sense, embrace it, don't fight it....
 
Quote from alexandercho:


I don't need to look at earnings to know that Wells Fargo can't rake in results equivalent to 05-06 so it shouldn't be trading in a range of $30-35
More...
And to add to that, it's gone from $8/share to $30/share in 6 months ?
If it was compelling at 8 bucks, is it still compelling at 30 ?
I think not.
 
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