Citigroup shares have been in the middle of a pullback recently and it looks like the correction found support at the 38.2% Fibonacci retracement level. This lines up with a former resistance level and the moving averages, which are now showing an upward crossover and hinting at further gains.
At the same time, stochastic is starting to move up from the oversold area, suggesting that the climb could resume. If so, Citigroup shares could move up to their previous highs past $57/share eventually. However, RSI is still pointing down, indicating that there is some selling pressure left.
A larger pullback could last until the 50% Fibonacci retracement level, which is near $52/share and the longer-term 200 SMA. A break below this area could indicate that a reversal is taking place and that prices could dip below $50/share soon.
Citigroup Shares and Earnings
Citigroup is set to release its Q2 2015 earnings report soon. Analysts are expecting to see earnings per share of $1.37 for the quarter for Credit Suisse while the Street’s prediction is at $1.36 and the consensus estimate is at $1.35.
Stronger than expected earnings figures could drive Citigroup shares much higher in the US session and throughout the week. Revenues are expected to carry on with their positive trend from the previous quarters. However, some say that Citi’s revenue is forecasted at $19.1 billion, representing a minor 3% drop from the previous quarter. Compared to the previous year, the revenue figure could depict a fall of 2%.
Investors are projecting the stock price to reach $56-73, but this depends mostly on how the company’s numbers turned out. Nonetheless, several rating firms are maintaining hold to buy recommendations for the stock.
Event risks for this trade also include the release of the FOMC minutes, as this usually has an impact on market sentiment and US equity indices. Apart from that, the fall in Chinese equity markets and the potential repercussions of a Grexit could also affect sentiment.
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