u s stock focus bullish breakout seen in citigroup 1853662017

Medium-term technical outlook on Citigroup (C) (Click to enlarge charts) Key technical elements Since its 27 June 2016 low of 38.31, Citigroup has been evolving […]

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By :  ,  Financial Analyst

Medium-term technical outlook on Citigroup (C)

Citigroup_week_09 Jun 2017

Citigroup_daily_09 Jun 2017

Citigroup versus XLF_daily_09 Jun 2017(Click to enlarge charts)

Key technical elements

  • Since its 27 June 2016 low of 38.31, Citigroup has been evolving within a medium-term bullish ascending channel with its upper boundary now acting as a resistance at 72.00 that also confluences with a Fibonacci projection of 0.618 from the upmove from 19 Feb 2013 low to 04 January 2017 high projected from 02 February 2017 low  (see daily chart).
  • Yesterday’s price action has staged a bullish breakout from a 6-month range configuration resistance at 61.40 in place since 04 January 2017.  In addition, the breakout has been accompanied by a relative high volume versus its previous five day average volume.
  • The daily RSI oscillator remains bullish above its corresponding support at the 46% level. This observation suggests that medium-term upside momentum remains intact.
  • The intermediate resistance stands at 66.60 which is defined by the gapped down seen on January 2009.
  • The key medium-term support now rests at 57.60 which is defined by a multi-month range support in place since 02 February 2017 low and the 23.6% Fibonacci retracement
  • The relative strength analysis of Citigroup versus its sector benchmark, the Financials ETF (XLF) continues to advocate a potential outperformance of Citigroup against the Financials.

Key levels (1 to 3 months)

Intermediate support: 61.40

Pivot (key support): 57.60

Resistances: 66.60, 72.00 & 75.85/77.10

Next support: 47.84


In the last five trading days, the S&P 500 Financials as represented by its ETF (XLF) had started to outperform the benchmark S&P 500 where it recorded a gain of 1.27% versus a meagre return of 0.15% seen in the S&P 500. Thus, upside momentum has started to revive in the Financials (XLF) which is the leading sector since the post U.S. presidential election before it started to shed its outperformance against the S&P 500 from March 2017 due to a potential delay in President Trump’s proposed policies on financial deregulations and a flat yield curve seen in the U.S. Treasuries.

One particular stock to take note will be Citigroup (C) where relative strength analysis continues to advocate further outperformance against its Financials sector benchmark (XLF). Technical elements of the stock also continue to display positive signs of momentum. Thus, as long as the 57.60 pivotal support holds, Citigroup is likely to see a further up move to target the next resistances at 66.60 and 72.00.

On the other hand, failure to hold above 57.60 may invalidate the preferred bullish bias to open up scope for a corrective decline towards the next support at 47.84 (the previous swing high areas of 27 Apr/25 May 2016).

Charts are from eSignal


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