Friday, June 13, 2008

Citigroup - 3 ways to play

Three ways to play Citigroup from a technical standpoint:

Scalp trade: sell at the dotted line - buy again when it corrects - but you have to be extremely fast.

Swing Trade: sell at the the solid line - wait for pull back to the dotted line and buy again.

Long Term Trade: take the 5% dividend and believe that C will trade in the 30's at the end of 09.

Citigroup's technicals are showing signs of improving. The RSI is near the bottom range, although we have not seen it cross below 30 to create a colorful and more convincing penetration: this is why you would start averaging into it here to be sure you are in the game, but your not the only one on the court.

Also, the Money Flow has started to show positive divergence and the volume is increasing here on the right side of the potential double bottom.

The MACD's have been carving itself out below the neutral line with a postive bias since the October plunge, with a penetration recently to +1, and now a retracement to -1. Remember, that right there is parallel divergence - a run back to 0 should be in order.

Sell stop at 17.5 to enable risk management.

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