Weekly chart analysis of Citigroup (the "big picture"):
Settings used: the 40 week exponential moving average (equivalent to the 200 day exponential moving average)
For the first time since mid 2007, the price of Citigroup is crossing this moving average to the upside. That's a buy signal for the long term.
Let's now look at the daily chart (to identify when to buy):
Since the bottom of March 2009 (price stood at around $1.0), the price has been making higher lows in July 2009 and February 2010: that's another bullish signal.
Price is now trying to break above the August 2009 resistance at $5.23.
Price is however still in overbought zone: look at the stochastics indicator. So a pullback might be expected over the next few days/weeks.
The fundamentals of Citigroup are improving: it announced on April 19 a net income of $4.43 billion in the last quarter. More info here.
What am I doing? I am already buying some shares now. I will buy more after the price breaks above the resistance of $5.23. My stop is below $3.10 which is the last higher low made in early February. This is a long-term investment: I plan to hold this stock for several years.
Apart from the technical point of view, fundamentally I would give a damn about the apparently good figures posted by the American banks during earning session in Q1. The balance regulations according to US gaap are diluted and don`t require banks to evaluate assets in real terms and in line with market prices. The assets are scored randomly linked to mathematical pricing models of the bank itself.
ReplyDeleteThe bank earnings are a big fake and I am quite sure that a lot of loans taken out for commercial property will need to be written off by the banks going forward.
I also want to point out that referring to the commercial property market in US 2 big investment trusts from Goldman Sachs and Morgan Stanley had to announce recently that 75% of investor`s equity was burned. I am waiting patiently to see that the commercial property market in US will send US banks again tumbling down.