Art's Charts

XLF and WFC Surge off Support

Arthur Hill

Arthur Hill

Chief Technical Strategist, TrendInvestorPro.com

The Financials SPDR (XLF) confirmed last week's harami with a gap breakout. XLF hit support in late October and formed a big spinning top on November 2nd. With the short-term trend down, the stock formed a long red candlestick on Wednesday and two inside days on Thursday-Friday. The high-low range for both Thursday and Friday was contained within Wednesday's high-low range.


Basically, a harami formed on Wednesday-Thursday and this pattern extended into Friday. With Monday's gap and range break, the harami is confirmed and support is affirmed. As with SPY, this breakout is only valid as long as it holds. Therefore, I am watching gap support and a move below 14.3 would call for a reassessment.

091110xlfClick this chart for details

Wells Fargo (WFC) declined all the way to the top of its support zone, but ultimately held and broke channel resistance with a surge on Monday. Even though the depth of this pullback is disconcerting, WFC did forge a higher high in mid October and held above its prior low. Technically, the trend remains up and this channel breakout is bullish until proven otherwise.

091110wfc Click this chart for details

Arthur Hill
About the author: , CMT, is the Chief Technical Strategist at TrendInvestorPro.com. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London. Learn More