Today’s chart is of Citigroup, Inc. (C) which operates a diversified financial services holding company, provides a range of financial products and services to consumers, corporations, governments, and institutions worldwide.
Ticker: Citigroup, Inc. (C)
What I Am Looking At:
- Financials/ Banks showing relative strength on a year-to-date basis
- C up more than 30 percent year-to-date, strong performer
- Shares recently peaked just slightly above the March high, which was the high for the year
- Current pullback showing a bullish flag pattern on daily chart
- 80-day moving average (purple line) and 38.2 percent retracement level from the July-October rally are just beneath current price which could offer support
- During the past 2 weeks short interest has decreased nearly 38 percent and currently represents 1.2 percent of the float
- Approximately 1 day to cover all short interest
- Goldman Sachs Financial Services Conference this Wednesday, December 5th
- Good amount of call activity (mostly bought-to-open) have been executed today at the 35-,36-, and 37-strike prices
- A bounce from potential support and further strength could result in a delta hedging rally from these out of the money calls
- Or if price continues to weaken we could see further pressure from a call unwind
Conclusion: Watch how shares behave around the 80-day moving average and also keep an eye on how price reacts to the $35, $36, and $37 levels if shares can back up to these levels.