Citigroup Appears Headed for New Highs

by Sam Collins | January 28, 2013 7:00 am

Citigroup (NYSE:C[1]) — This diversified global financial services company provides a wide range of financial products to consumers, corporations and governments.

On Jan. 4, the Trade of the Day[2] said, “Technically, C has broken out from a nine-month cup-and-handle formation on a powerful breakaway gap. This type of gap occurs at major turning points, and while most gaps are usually ‘covered,’ i.e., price drops and fills in the hole in the chart, this type often remains ‘open.’ The break is also supported by a new buy signal from our proprietary indicator, the Collins-Bollinger Reversal (CBR), and high volume confirms it.”

Since then, Citigroup disappointed analysts by reporting Q4 earnings of $0.38 versus an expected $0.99. But one-time charges, litigation expenses and trading losses made up for most of the difference.

Despite the earnings disruption, the stock pulled back slightly, reversed on a second CBR “buy,” and appears headed for a new high. A new trading target of $50 and longer-term target of $55 are supported by its positive response to disappointing news.

C Chart
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Trade of the Day Chart Key

  1. C:
  2. Trade of the Day:

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