Strategic Finance
Citigroup Inc looks to head back into previous trading range |
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| Strategic Finance | |
| Written by Gary Howes | |
| Tuesday, 18 May 2010 | |
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Futures point to a strong move back above previous support levels.
Citigroup Inc (NYSE:C) the bank 27 percent owned by the US government, rose 1.3 percent to $3.91 in pre-market trading. But for those who are willing to step back and make a realistic assessment of the situation, there’s no reason to shy away from investing in Citigroup shares, especially for those with a long-term time horizon. According to analysts at Traders Huddle shares of Citigroup Inc closed the trading session at $3.86 below calculated support at $3.90 breaking the stock technically, raising concerns by investors, as the move might trigger more selling. Citigroup's stock was trading in a well defined range with support at $3.90 and resistance at $4.35; given that this range was broken traders will be closely monitoring the stock?s price action for clues of direction. From a technical perspective it can be expected that previous support becomes resistance, as the new range gets defined, however, given that Citigroup's stock is still near the broken support, traders will be focusing on $3.90 to see if the stock can bounce back and return to its previous range. According to Traders Huddle: "Traders wanting to establish a short position in Citigroup can do so if the stock breaks the intraday low, or if the stock bounces back and selling materializes again at previous support of $3.90. "For traders wanting to establish a long position, wait for price action to take the stock back to calculated support, which will provide a best entry point to build the position."
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