There's no question that 2013 has been a good year for Wells Fargo ( WFC). Year-to-date, shares of the big bank are up 18%. But it could be getting even better for investors.
That's because Wells is currently forming an ascending triangle pattern, a bullish setup that's formed by a horizontal resistance level above shares and uptrending support to the downside. Essentially, as WFC bounces in between those two technical price levels, it's getting squeezed closer and closer to a breakout above resistance at $41.50. When the breakout happens, we have our buy signal.The financial sector, and Wells Fargo in particular, has shown outsized relative strength over the course of the last month and change. From a statistical perspective, positive relative strength trends tend to signal outperformance over the next three to ten months. That bodes well for Wells Fargo owners right now. Don't be early on this trade. Wait for $41.50 to get taken out before jumping in.
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