Wells Fargo (NYSE:WFC) is a diversified financial services company providing services to consumers and businesses. The bank provides lending services in terms of credit cards, loans (auto, mortgage, personal), as well as insurance services. The heart of the bank’s operations is in the United States, but services are provided around the world.

The bank’s stock has been lagging behind its peers, and is set to play catch up in terms of stock price. On a 2 standard deviation move to the downside Wells Fargo would be a buy.

The stock has been forming a basing pattern since early May 2023, and is showing a strong support line for the recent uptrend.

A tailwind for WFC is rising interest rates by the Federal Reserve which will allow WFC to benefit from improvements in net interest income. The bank has seen increases in loan balances, which means they have more loans which coupled with higher interest rates benefits their net interest income.

We see the stock reaching levels of about $47.50, where we would hedge our position.