Join our community of traders FOR FREE!

  • Learn
  • Improve yourself
  • Get Rewards
Learn More

A lawsuit has been filed last Thursday in San Francisco federal court by Texas-based J Edwards Jewelry Distributing against Wells Fargo & Company (WFC), which alleged the bank had encouraged thousands of retailers across the United States to charge “hidden fees” to their clients through financing programs offered by Wells Fargo.

The lawsuit cited violations of the US Truth in Lending Act, which postulates financing charges must be plainly disclosed by banks.

Wells Fargo shares closed higher for a second consecutive trading session in New York on Friday. The stock went up 3.38% ($1.81) to $55.44, after touching an intraday high at $57.12, or a price level not seen since March 16th ($57.17).

Shares of Wells Fargo & Company have retreated 8.62% so far in 2018 compared with a 1.67% gain for the underlying index, S&P 500 (SPX).

In 2017, Wells Fargo’s stock surged 10.09%, thus, it again underperformed the S&P 500, which registered a 19.42% return.

According to allegations, retailers were instructed to add financing fees to the price of items, while advertising that clients purchases could be financed without interest being charged. In fact, however, higher purchase prices included a hidden, double-digit interest charge, the lawsuit stated.

The financing programs, promoted as Wells Fargo Home Projects or Wells Fargo Jewelry Advantage, were presented on the websites of retailers or at their traditional stores. However, the content used to describe these programs was controlled by Wells Fargo.

The lawsuit said that instead of charging fees to clients who used a financing program by Wells Fargo, retailers were instructed that purchase prices could be inflated so that such fees were covered.

The lawsuit pointed out that a client could purchase a ring for $3 000 and be charged zero interest, in case he/she paid the entire amount within 60 months. Then, as much as 22.5% of the purchase price were forfeited by the merchant to Wells Fargo in exchange for the interest-free financing.

The complaint also said that the same ring could be purchased for $2 325, in case clients paid in cash, which would save them $675. Therefore, by using a financing program by the bank, clients simply paid $675 in undisclosed charges.

According to CNN Money, the 29 analysts, offering 12-month forecasts regarding Wells Fargo’s stock price, have a median target of $62.00 with a high estimate of $75.00 and a low estimate of $50.00. The median estimate represents an 11.83% upside compared to the closing price of $55.44 on June 29th.

The same media also reported that 13 out of 31 surveyed investment analysts had rated Wells Fargo’s stock as “Buy”, while 12 – as “Hold”. On the other hand, 4 analysts had recommended selling the stock.

Daily and Weekly Pivot Levels

With the help of the Camarilla calculation method, todays levels of importance for the Wells Fargo stock are presented as follows:

R1 – $55.60
R2 – $55.75
R3 (Range Resistance – Sell) – $55.91
R4 (Long Breakout) – $56.38
R5 (Breakout Target 1) – $56.93
R6 (Breakout Target 2) – $57.15

S1 – $55.28
S2 – $55.13
S3 (Range Support – Buy) – $54.97
S4 (Short Breakout) – $54.50
S5 (Breakout Target 1) – $53.95
S6 (Breakout Target 2) – $53.73

By using the traditional method of calculation, the weekly levels of importance for Wells Fargo & Company (WFC) are presented as follows:

Central Pivot Point – $55.19
R1 – $57.37
R2 – $59.29
R3 – $61.47
R4 – $63.64

S1 – $53.27
S2 – $51.09
S3 – $49.17
S4 – $47.24

TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover Forex, Price Action and Social Trading.

Related News

  • Commodity Market: Support and Resistance Levels for Thursday (October 20th 2016)Commodity Market: Support and Resistance Levels for Thursday (October 20th 2016) Silver (SI) for December delivery (1 Troy Ounce)R1 – $17.683 R2 – $17.703 R3 (Range Resistance – Sell) – $17.724 R4 (Long Breakout) – $17.784 R5 (Breakout Target 1) – $17.855 R6 (Breakout Target 2) – $17.884S1 – $17.643 S2 – […]
  • GBP/USD rises as optimism appeared after UK labour market dataGBP/USD rises as optimism appeared after UK labour market data Today GBP/USD pair increased, right after the release of positive data, concerning the labour market situation in United Kingdom. The pound expanded its positions versus the US dollar, reaching 1.5254 during European trade session. Resistance […]
  • Commodities trading outlook: crude oil swings, natural gas futures on the riseCommodities trading outlook: crude oil swings, natural gas futures on the rise Both West Texas Intermediate and Brent crude benchmarks swung between gains and losses on Tuesday ahead of government data that may show US crude oil and gasoline stockpiles declined last week, but easing geopolitical tensions in Iraq kept […]
  • EUR/USD remained lower following US producer prices dataEUR/USD remained lower following US producer prices data Euro continued trading on lower levels against the US dollar on Friday, following the release of good data, regarding producer prices in the United States and in expectation of the consumer confidence report by University of […]
  • Forex Market: AUD/USD daily forecastForex Market: AUD/USD daily forecast During yesterday’s trading session AUD/USD traded within the range of 0.9231-0.9258 and closed at 0.9257.At 8:57 GMT AUD/USD traded at 0.9264, gaining 0.29% for the day. The pair touched a daily high at 0.9278 at 6:00 GMT, breaching the […]
  • Forex Market: EUR/USD daily trading outlookForex Market: EUR/USD daily trading outlook Yesterday’s trade saw EUR/USD within the range of 1.1271-1.1378. The pair closed at 1.1316, edging up 0.23% on a daily basis. It has been the 16th gain in the past 29 trading days, but also the slowest one since January 27th, when the pair […]