4 Trade Ideas For Citigroup
Dragonfly Capital | Apr 29, 2019 07:18AM ET
Citigroup (NYSE:C), $C, made a top in September and then started lower. It paused in November and then continued lower in December. After finding a bottom it built a “V” shaped recovery, getting back to the November levels quickly. But then it paused and consolidate for nearly 3 months before breaking resistance and moving higher. It reached a 78.6% retracement of the drop 2 weeks ago and pulled back. Friday saw it break the short bull flag to the upside though, setting a target to 73.
The RSI is strong and holding high in the bullish zone with the MACD flat but positive. The Bollinger Bands® have flattened but there is a lot of room to the upper Band. It also looks ready to print a Golden Cross. There is resistance at 70 and 71.50 then 73.50 and 75.25. Support lower comes at 68.40 and 66.50 then 65. Short interest is low under 1%. The company is expected to report earnings next on July 15th. The stock pays a dividend with a yield of 2.59% and the stock starts trading ex-dividend on May 3rd.
The May options chain shows the largest open interest at the 65 put. But there is larger open interest on the call side found at 70 and then 65. June options see the biggest open interest on the put side at the 60 strike and progressively lower as the strikes rise. On the call side it is biggest at 70. September options are the first to cover the next earnings report and they are just starting to build open interest with a focus at the 62.50 put and from 65 to 75 on the call side.
Citigroup, Ticker: $C
- Buy the stock on a move over 70 with a stop at 68.
- Buy the stock on a move over 70 and add a September 67.50/65 Put Spread ($1.00) while selling the September 77.50 Call $1.00 credit).
- Buy the September 60/70/75 Call Spread Risk Reversal ($1.05).
- Buy the June/September 75 Call Calendar ($1.30) and sell the September 60 Call ($1.00 credit).
Elsewhere look for GC to possibly reverse high out of a pullback while Crude Oil pauses in its uptrend. The US Dollar Index has changed to a short term uptrend while US Treasuries are biased higher. The Shanghai Composite and Emerging Markets are both pulling back in their uptrends.
Volatility looks to remain very low keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts are strong in the weekly timeframe with the QQQ leading the way at all-time highs and the SPY right behind with the IWM improving. On the daily timeframe, the QQQ may be ready for a pause and it might be time for it to pass the baton to the IWM which is back at resistance. The SPY meanwhile remains strong and a fraction from new all-time highs. Use this information as you prepare for the coming week and trad’em well.
Get The News You Want
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.