Citi: This Big-Cap Bank Stock is a "Buy"

The shares have been bouncing from a key technical level in recent weeks

Citi Research upgraded Wells Fargo & Co (NYSE:WFC) to "buy" from "neutral," saying the bank's potential to return to revenue growth next year could prove "issues are moving to [the] rear view mirror." The brokerage firm maintained its $60 price target on WFC, a 12% premium to last night's close at $53.56.

In reaction, WFC is up 0.8% in electronic trading, set to take on recent resistance in the $54.00-$54.50 range -- home to their late-September bear-gap highs. However, the stock has gained 7% since a successful test of the round $50 mark on Oct. 24, and closed above its 40-day moving average last night for the first time since Sept. 5.

Options traders have been growing more optimistic on Wells Fargo, too. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), WFC's 10-day call/put volume ratio of 2.42 ranks in the 71st annual percentile, meaning calls have been bought to open over puts at a quicker-than-usual clip.

While short-term WFC options are currently pricing in elevated volatility expectations at the moment -- based on the stock's 30-day at-the-money implied volatility (IV) of 22.8%, which ranks in the 79th annual percentile, calls are cheaper than their put counterparts. This is per Wells Fargo's 30-day IV skew of 18.6%, which registers in the 95th percentile of its 12-month range.