Helped by news the Fed has approved a dividend hike,Wells Fargo ( WFC ) is trading near levels last seen in October 2008.
The banking giant gained 5% last week in convincing turnover as it received that OK, then it eased back 1% on Monday.
The stock's chart shows a cup-with-handle pattern with a 35.56 buy point, as this column pointed out back on Feb. 11 .
Wells Fargo struggled to advance beyond 35.56 in late February, but its advance is now gaining steam.
The stock closed 6% past that level Monday, putting it just outside a proper buying range for IBD-style investors .
Now that Wells Fargo has the Fed's OK, the San Francisco-based bank expects to raise its quarterly dividend to 30 cents a share for this year's second quarter, up from the current level of 25 cents. Its board still needs to approve the hike at its April meeting.
The move will boost Wells Fargo's annualized yield to about 3.2%, up from its current level of around 2.6%.
The bank said it also got approval to buy back more stock this year than it did last year, but it didn't give details on the size of its repurchase program.
CEO John Stumpf said in a news release that the bank has managed to step up its dividend and buyback, thanks to its diversified business model.
The Federal Reserve announced late Thursday that it had OK'd the capital plans for Wells Fargo and 13 other big banks.
The central bank also required two banks,JP Morgan Chase ( JPM ) andGoldman Sachs ( GS ), to refile by Sept. 30, and it nixed outright plans from BB&T ( BBT ) and government-controlled Ally Financial.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
