The American multinational investment bank and financial services corporation headquartered in New York City, Citigroup Inc. (NYSE: C) shows signs of an upcoming price surge according to its latest charts.
Bullish Indications
#1 Symmetrical Triangle Pattern Breakout: As you can see from the daily chart, Citigroup had recently formed a symmetrical triangle pattern. This pattern is shown as pink lines. A symmetrical triangle pattern represents a period of consolidation before the price breaks out. This is typically formed when there is indecision in the price movements and uncertainty among the buyers and sellers. Once a breakout from the upper line occurs, it usually signifies the start of a new bullish trend. Currently, the stock has broken out of the symmetrical triangle pattern, indicating possible bullishness.
Daily Chart – C
#2 MACD above Signal Line: The MACD line (blue color) is currently above the signal line (orange color) in the daily chart, indicating a bullish bias.
[hana-code-insert name=’adsense-article’ /]#3 Above MAs: The stock is currently trading above the 50-day as well as 200-day SMA, indicating that the bulls are currently in control.
#4 Bullish Aroon: The value of Aroon Up (orange line) is above 70, while Aroon Down (blue line) is below 30. This indicates possible bullishness.
#5 IH&S Pattern: The stock has been forming an Inverted Head and Shoulders (IH&S) pattern.
This pattern is marked in orange color in the daily chart.
The stock has currently broken out of the IH&S pattern. This is a good support level and seems like a good area for the stock to bounce upwards.
#6 MACD above Signal Line: The MACD line (blue color) is currently above the signal line (orange color) in the weekly chart as well, indicating possible bullishness.
Weekly Chart – C
#7 Bullish RSI: As you can see from the weekly chart, RSI is currently above 50 and moving up, indicating bullishness. The stock is also trading above its 50-week and 200-week SMA, indicating a bullish bias.
#8 Strong Support: The weekly chart shows that there is a strong support level nearby for the stock. This is marked as a green dotted line. This indicates that the stock may soon move higher from this level.
#9 Bullish Aroon: The value of Aroon Up (orange line) is above 70, while Aroon Down (blue line) is below 30 in the weekly chart as well. This indicates possible bullishness.
Recommended Trade (based on the charts)
Buy Price: If you want to get in on this trade, you can purchase the shares of Citigroup at the current price of $67.38.
TP: Our target prices are $75 and $80 in the next 4-6 months.
SL: To limit risk, place a stop loss at $64.80. Note that this stop loss is on a closing basis.
Our target potential upside is almost 11% to 19% in the next 4-6 months. For a risk of $2.58, our target rewards are $7.62 and $12.62. This is an almost 1:3 and 1:5 risk-reward trade.
In other words, this trade offers nearly 3x to 5x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down with high volume from the symmetrical triangle pattern. The sell-off of the stock could also be triggered in case of any negative news, overall weakness in the market, or any regulatory changes in the sector.
Happy Trading!
Tara
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