Citigroup, Inc. (C)

Citigroup, Inc. (C) is showing some interesting technical formations both on the daily and weekly charts. Today on 26th November 2010 it closed at $4.11.

The chart above is a daily chart for C. It can clearly be seen that the stock has been in a downtrend since November 8th. But it seems that now is the time for a change in direction. Notice that today Citigroup failed to breakdown from the support level at $4.10. Moreover the same support level was tested back on 1st and 23rd November but it still held. Also, the stock hasn't traded below $4.10 for over a month now, clearly showing that this support is pretty strong. Apart from this it can be seen the stock recently touched its 50 day moving average after a short down trend over the past few weeks. Whenever a stock touches its moving average a change in direction is inevitable.
I think that Citigroup might make a turn next week and will start moving up (probably only for a week or two). But still I will advise caution. A good sell point for short term traders can be the resistance at $4.5.

The weekly chart for Citigroup shows a well formed symmetrical triangle as can be seen above. Symmetrical triangles are a very interesting technical indicator as they can precede a sharp downtrend or an uptrend, so we have to be careful when dealing with them. Usually a stock would break above or below a symmetrical triangle when the triangle is about two thirds complete. But in this case we can see that the triangle is more than 90% finished, which shows that a breakout is long due and therefore is inevitable in the near future on the weekly chart. I would advise long term traders to keep an eye on Citigroup and only buy it if it breaks out above $5.00 a share fueled with heavy volume on the week of breakout. However, if Citigroup breaks below $3.60 a share then avoid it at all costs.

To sum up Citigroup, Inc. is presenting a probable quick profit opportunity for short term traders, and is worth keeping an eye on for long term traders. But, then again caution and patience is advised before buying this stock. Long term traders: look for a decisive breakout accompanied by heavy trading volume before jumping in.

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