Citi shares recently came off a test of a key resistance area, which lined up with the 200 SMA on the daily time frame. Stochastic is heading down from the overbought zone, indicating that selling pressure is still present.
The selloff might last until the range support visible on the same time frame. This is located at $48.00 per share. A breakdown of this support area would suggest that further losses are in the cards. If you’re looking to sell Citi shares, it’s not too late to hop in a short momentum trade until the range bottom. On the other hand, if you’re waiting to buy Citi shares, you can set a buy order at the $48.00 level and aim for the top of the range near $50.00.
Citi Shares Forecast
Bear in mind that Citi shares are under heavy selling pressure ever since Bloomberg reported that the U.S. government might look into conduct a mortgage probe on Citigroup and Bank of America. The company has been asked to pay a $10 billion settlement on its mortgage securities default in the financial crisis.
A person familiar with the investigation, said that talks broke off between the bank and prosecutors on June 9. Citi shares were down 1.7 percent for the day in New York trading following the report.
With that, the odds for a downside break of the range support on Citi shares is high, and so is the possibility of a continued selloff. Bear in mind though that Citi has reported increasing revenues for the past quarters and that this might be enough to sustain buying momentum from a longer-term perspective.
To contact the reporter of the story: Jonathan Millet at email@example.com