Citigroup (C)

Here is another banking sector article, this one for Citigroup (C). This article will not only help to look at this individual stock, but it can also reinforce charts and patterns that I’ve identified on other bank stock charts.

The first assumption that I am going to make before looking at any charts for Citigroup is that it is probably in or near the end of a Wave 3 in a Bullish Impulse wave pattern. That is where I have noticed the share prices for almost all other banking stocks. I have no reason at the outset to think Citigroup’s charts will be any different.

Since Citigroup (C) reported earnings on January 18, 2017, the market has had plenty of time to digest the information. So let’s start reviewing some of its charts and see what action is most likely in store for its share price!

Citigroup (C) – 20 Year Chart

This first chart for Citigroup (C)  is the same as all other banks I’ve covered, a 20 year monthly candlestick chart to look at any of its potential longer-term trends.

After reading some of my other banking stock articles, you may have noticed that I placed Fibonacci Extension Tools on each of their charts to look for upside potential. However, sometimes alternative means of calculating upside price targets need to be used. That is why I used the Fibonacci Retracement Tool on this 20 year chart to calculate what I think is the minimum retracement for Citigroup’s massive downtrend.

Using a Fibonacci Retracement Tool on Citigroup’s (C) 20 Year Monthly Candlestick Chart to Calculate a Minimum Upside Price Target

I placed a Fibonacci Retracement Tool on the last leg of the downtrend to be conservative at first. Where I placed the tool is on Wave 5 of a probable Bearish Impulse wave pattern. Therefore just looking at the retracement possibilities for Wave 5 rather than the entire downtrend provides more realistic price targets to watch for in the “short-term”.

Look for the 38.2% Retracement Line. That line could be[s2If !current_user_can(access_s2member_level1)]….

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I continue discussing its upside minimum trade that I would anticipate as well as pullback areas to make scale-in purchases for the current uptrend.

If you are not a Trendy Stock Charts member, consider subscribing today! There are several different subscription plans available.[/s2If][s2If current_user_can(access_s2member_level1)] the minimum trade to come out of Citigroup’s current uptrend. And at $95.76, that minimum trade is almost a double from current prices.

C – Scale-In Opportunity

This next chart for Citigroup (C) is a 2 year weekly candlestick chart. I want to take a closer look at more recent activity to better calculate some support areas that can be used as scale-in areas in case of future pullbacks.

Citigroup (C) had nice volume on the breakout from its initial trading channel. An initial scale-in purchase below $55 and closer to $50 is an excellent opportunity to get long on this company.

Analyzing a Potential Breakout from a Trading Channel for Citigroup (C) on its 2 Year Weekly Candlestick Chart

The 161.8% Target Line from the Fibonacci Extension Tool was reached. Typical share price movement is a pullback to or near the 100% Target Line. C’s share price is near the top of a Trading Channel. I’ve broken down the Trading Channel into quarters to help identify potential reversal areas during this pullback. A pullback near the $50 area would be the best opportunity.

Watch for the MACD Histogram to start showing a slow-down in selling momentum. When that happens, that could be an indicator that it is time to make the scale-in purchase.

C – 200 Day Moving Average

This 1 year daily candlestick chart has moving averages overlaid on it. I left the Trading Channel and the Fibonacci Extension Tool from the weekly chart on this chart too.

The first thing that jumps out to me is the Golden Cross and this could be the first pullback to the 200 Day moving average after the development of its Golden Cross.

Analyzing Citigroup’s (C) Moving Averages for Support During the Pullback

The first pullback to the 200 Day moving average after the development of a Golden Cross is usually a lesser risky time to enter into the trade. Could the $50 area be the bounce area? That would be a discount of 10% from today’s closing price.

Citigroup (C) – Summary

Citigroup (C) appears to be in the process of consolidating some of its gains over the last 6 months. Look for its share price to find support in the $50 – $52.50 area. This area could be used to make a scale-in purchase.

Watch to see if Citigroup’s (C) share price finds support at the top of the Trading Channel. If the top of the Trading Channel breaks, look for the next support area around the $50 – $52.50 area.

If you are a longer-term trader, wait for the expected continued pullback over the next week or so. Day traders can try to play the bounce or break from the Trading Channel.

Any purchases made can be held until a re-test of the top is performed. That would be the re-test of the top from the uptrend that immediately preceded this correction. That is the $61.63 mark for Citigroup (C).

Longer-term, most bank stocks should continue to perform well. But one thing is for certain, some will perform better than others. Citigroup’s (C) prospects look decent from the chart. And buying lower on any pullback can only help to increase the risk to reward ratio.

Good luck trading!!