Analyst: This Bank Stock is a "Top Pick"

Call traders are responding to the news

Deputy Editor
Dec 6, 2021 at 10:26 AM
facebook twitter linkedin

Wells Fargo & Co (NYSE:WFC) was just named a "top pick" by Morgan Stanley, who said the bank, alongside the sector as a whole, will see tailwinds from quicker-than-expected interest rate hikes. The firm additionally upgraded Wells Fargo to "overweight" from "equal weight," with a price target of $61, noting that the emergence of the Covid-19 omicron variant should only push recovery back by about a quarter. 

Coming into today, sentiment on WFC was mostly positive, though there's still room for additional upgrades. Of the 12 in coverage, five still rated the stock a  tepid "hold." Shorts, meanwhile, are hitting the exits at an alarming rate, with short interest down 14.1% in the most recent reporting period.

Call trading has ramped up this morning, following the upgrade. In the first half hour of trading, 13,000 calls have crossed the tape, which is double the intraday average. However, the most popular contract is the December 45 put, followed up by the weekly 12/10 48- and 49-strike calls.

Last seen up 2.2% at $48.81 in response to the bull note, Wells Fargo stock is battling a short-term ceiling at the $49 level. Fresh off its third-straight weekly loss, WFC has shed 5.3% over the last month. Meanwhile, long-term support from the 150-day moving average has stepped up to keep this pullback in check, and the equity remains up 58.2% year-to-date.






Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

Schaeffer's Daily Bulletin Offer


Special Offers from Schaeffer's Trading Partners