Technical Analysis on Goldman’s Citigroup Upgrade

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New York, Oct 26th (TradersHuddle.com) – Shares of Citigroup (NYSE:C) were the bright spot yesterday in the financial services sector with the stock closing at $4.21 or 2.43% higher than last Friday’s close. Citigroup shares price action reacted favorably to the news that Goldman Sachs (NYSE:GS) was adding Citi to their conviction buy list.

Goldman’s upgrade keeping its 12 month target of $5.50 for Citigroup stock; basically citing that among its financial services peers has very limited exposure to the foreclosure crisis. This crisis has impacted considerably shares of other financials like Bank of America (NYSE:BAC) that continues to set new 52 week highs.

We are starting to see some differentiation between the winners and the losers and the financial sector, as they aren’t all trading collectively as they once were. Citigroup’s upgrade today confirms the differentiation taking place in the market.

Technically Citigroup shares are practically breaking out, as they start to move above $4.20 area, basically giving them clear skies all the way to $5.15 level. Current price action is following an up channel that has defined support at {module 212}{reg} around the $3.95 to $4.00 area, while the resistance upper bound trend line is set around the $4.30 area.

If Citigroup stock is to continue on its current channel we can anticipate a move towards the $4.30s prior to start feeling some selling pressure, definitely we could be expecting higher lows in case of a market correction if we consider current up channel defined in the below chart.

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