Making Sense of Citigroup’s Price Action

Published on Thursday, 02 September 2010 14:07 Written by The Trader Next Door

New York, Sep 2^nd (TradersHuddle.com) – As the market struggles to follow through after yesterday’s big snap back, we can see that today the financial sector is putting bearish pressure on the overall market, with key banks reversing to the negative side unable to hold yesterday’s gains.

Although the financials rally yesterday, there is lack of follow through today, which is just a signal of how there is still no commitment, with buyers stepping out at key technical resistance points. In the case of Citigroup (NYSE:C) being a very cheap stock we can see the higher movements in terms of percentage, however it’s clear that the financial giant’s stock is immersed in erratic price action.

Citigroup broke a key uptrend back in August, when its shares moved back below $3.90 level, sparking a technical sell signal that pushed the stock back down to the July lows around the $3.60 area, from that area it found support sending the stock higher retesting the $3.90~$3.94 area.

Citigroup shares have significant support as the price action approaches the $3.50 area, which happens to coincide with the offering price of the capital raise, when Citigroup was able to repay TARP.

By reviewing Citigroup’s chart below {module 212}Please Login to See Member Only Content -- It's Free

Long Citigroup