After weeks of being weighed down by accusations of making false representations, Citigroup shares look ready to resume the longer-term climb. Price bounced near the 100 SMA, which has held as a dynamic support area in the past.
The 100 SMA is still above the longer-term 200 SMA, confirming that the uptrend is likely to stay intact. In addition, stochastic is showing upside momentum, which could mean further gains for Citigroup shares. RSI is on the move down but may be ready to turn higher and reflect an increase in buying pressure.
A rally could take the price back above the $60/share level or the previous highs. On the other hand, a return in selling momentum could mean a break below the moving averages and further declines for the stock.
Citigroup Shares Forecast
According to the SEC, Citigroup made false and misleading representations to investors in the ASTA/MAT fund and the Falcon fund, which collectively raised nearly $3 billion in capital from roughly 4,000 investors before they collapsed. Following investigations, Citigroup Inc. agreed to pay nearly $180 million to investors to settle accusations.
The Citigroup affiliates, Citigroup Global Markets Inc. and Citigroup Alternative Investments LLC, agreed to pay the SEC fines without confirming or denying the accusations. Still, without this potential lawsuit on its shoulders, Citigroup shares could find more upside.
With no potential event risks lined up from the company in the next few days, shares could trade according to overall market sentiment. The US economy is set to print its inflation numbers within the week and positive data could support monetary policy tightening expectations and confirm that the economic recovery is going on. On the other hand, weak data from the US could trigger a selloff among equities if it casts doubts on the economy’s ongoing rebound.
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