Hello Lou,
Always great you hear you on AM640. Citigroup stock is off from it’s 52week high. Which way do you see it trending in the coming 52 weeks? It would be great to hear your thoughts on pros/cons of investing in Citigroup and also suggestions on similar stocks.

Thanks and Happy Capitalism.

Raj

Hi Raj,

Thanks for the assignment. I noticed earlier in February a Bloomberg report that in the last quarter of  2009 hedge funds had stepped up buying in Citigroup Inc. ( C NYSE) to the tune of 500 million shares. Lets spend some time and see if its worth following in the steps of the giants.

The three year chart provides a clear view of the resistance that C hasn’t been able to break above at $5.00. The stock also looks to be trading in a down channel that will require some better than expected developments to overcome.  In addition the 50 day moving average has crossed below the 200 day moving average and the stock has met resistance along the 50 day moving average.

The six month chart isn’t indicating an aggressive breakout from the down channel it has been trading in since the October 2009. The last seven days of trading shows the struggle the stock  has been having with the resistance along the 50 day moving average.

If you are looking for an entry point I think you should look at the $3.85 range. At hat price some of the risk would have been taken off the table and you could see another attempt at the $5.00 level.

Citigroup will next report its Q1 results in April and you should put that a note to watch the stock as we get closer to that date. Another factor to consider is that according to investment seasonality expert Brooke Thackray the period of  strength for financials runs from mid January to mid April.

Make it a Huge Olympics and Happy Capitalism!