Positive Stress Tests Could Drive Wells Fargo to $44
With the results of the latest stress tests coming Thursday, the pros turned to the charts, looking for the best trades.
And top technical analyst JC O’Hara of Phoenix Partners Group suggests the following:
Looking at Wells Fargo, O'Hara says the stock is currently trading in a tight range with support around $30 and resistance around $32. “However good news (from the stress tests) on Thursday could lift Wells to $34,” he says.
That’s significant because $34 is the top of a multi-year trading range. If momentum buying can drive Wells above $34, O’Hara thinks the stock could break out – and trade as high as $44.
For the past several months, Citigroup has run into resistance around $34, explains O'Hara. However, he thinks the stock can move higher, “and the numbers coming Thursday could provide the catalyst."
If positive results drive buying, O'Hara tells us, "the stock could challenge the July highs."
Aside from the stress test results, O’Hara also suggests putting gold on the radar. Although the precious metal has traded poorly recently he says the long-term trend from 2008 remains in tact. “The trend line is $1630,” says O’Hara. “As long as gold stays above that level, I’m a buyer in hopes the next move can take gold to $1800.”
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Trader disclosure: On Mar 12, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; P. Najarian is long AAPL; P. Najarian is long C; P. Najarian is long WFC calls; P. Najarian is long INTC; P. Najarian is long YHOO; P. Najarian is long JOYG calls; P. Najarian is long COP; P. Najarian is long PEP; P. Najarian is long HPQ; Scaramucci is long IBM; Scaramucci is long PFE; Scaramucci is long GS; Scaramucci is long JPM; Scaramucci is long PEP; Scaramucci is long DELL; Scaramucci is long HPQ
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