Citigroup - breaking an ascending triangle.

Once again, we look at the Banking sector. This time let’s take a peek at Citigroup, Inc. Citi, has performed very badly since they executed their reverse split in 2011 having their share price fall all the way to 21.40$ from a 52 week high of 46.90.

Currently listed at 37.00$, down 0.30 on the day. It opened gapped down 0.50$.

What is interesting from this stock is that it has picked up 73% from the lows of the year and has broken out from its ASCENDING TRIANGLE, recently in the last few weeks, as you can see in the chart.

Although there is pressure on the financials this week, there is a possibility to buy on strength in a quick and profitable move.

On the 30 min chart, we see a strong support at 36.50 – 36.25, should the 37.00 figure be broken on the downside (which at this rate, looks quite probable).

Our strategy here is to put a buy order above today’s open price of 37.30, e.g., buy order at 37.35 – 37.40, with a possible run to 38.50 – 38.75. This would give us a profit of 4% on equity in a few days (with no leverage). We’re not looking at a medium term investment here. Once bought and if in a week the stock does not reach these levels, then we’d take profit at market price.

However, should Citi not hit our buy target by tomorrow, we’ll re-evaluate and establish new purchase prices, because it could have started it’s Wave 4 on Elliot Waves, and this mean a minor correction is due. 

Our strategy is to buy on added strength and take a few bucks into our pocket. It could be considered a risky trade; therefore, we buy on strength and take profit very quickly. Should our trade be executed at 37.35 and we want to take less but safer profits, we could put a sell order at the close of the gap at 37.80.

On the other side, if we're not in a hurry, we could wait for a more juicy level, i.e., 36.25 - 36.00 and go long from there. You will definitely get more bang for the buck. 

On March 20th, Citi announced it sold a 2.71 percent stake in Shanghai Pudong Development Bank, raising $668 million, just two days before we are informed that China's manufacturing sector activity shrank in March for a fifth successive month.

The S&P is struggling to hold its 1400 level.

Trade safely. Trade with discipline.

@AmarDaryanani