“C” once a high flyer amongst banks trading at over 50.00 a share is now trading under 5.00 per share and sold as low as 1.00 per share during the financial crisis. Some think “C” is a good long term investment though and are staking big bucks on that outcome. William Ackman of Pershing Capital took a large stake 146.5 million shares in the first half of 2010. Mr. Ackman has made a career out of buying out of favor stocks that he feels are good long term values. Another successful value investor Bruce Berkowitz of Fairholme Capital has also taken a large stake in the common stock of Citigroup amounting to 237 million shares at the end of 2010. Due to its mega cap status hundreds of portfolio managers and fund managers own “C”. What makes it interesting is that these two major value style investors have taken what appears to be large long term stakes in this company.
Citigroup currently trades at approximately 80% of its book value of 5.71 a share. Its current price $4.56 a share as of Friday April 8th. 2011 close
If you take a look at the long term, weekly, chart of C for the last couple of years we are making higher bottoms along the way up. It violated the 50 week MA in Jan. 2010 and during the June through Sept. pullback. Recent price has not touched the 50 week MA on its last pullback so it could be seen as a stronger bottom if indeed it is in place. Stochastic on the weekly chart shows price has probably bottomed for now and would be considered oversold. MACD and Stochastic on daily are both rising although the MACD is below “0” on the daily chart. MACD on the weekly chart is just above “0” indicating improving technical activity in the stock.
On the recent pullback on the daily chart you can see the 200 day MA just below price. On the bounce price hit the 50 day MA and price pulled back a little to test itself. On the daily chart you can see, March 21st., the price action has a wide range for the day and just above average volume. They either went stop hunting for the day or tried to push prices higher and encountered some selling. The long and the short of it, pardon the pun unintended, is that there has been no real follow through selling. Price may come back and test the 200 day MA but the trend shows higher prices and a shortening of the range in price and in time in its downturns. This shorter recovery range in time and price is generally a positive for trend followers as it takes less time for trending patterns to become evident to observers.
As an investor I enjoy finding good values under book value. Recovery stories always take some time to play out and after a debacle the size of the financial crisis it is small wonder the stock price is still languishing. As an investor using technicals to time a trade I particularly enjoy it when value investors buy a stock and the patterns of accumulation and distribution become more clearly demarcated. Citigroup as a recovery story will continue to play out for some time to come and the stock price is beginning to show evidence of increased investor confidence.
Citigroup currently trades at approximately 80% of its book value of 5.71 a share. Its current price $4.56 a share as of Friday April 8th. 2011 close
If you take a look at the long term, weekly, chart of C for the last couple of years we are making higher bottoms along the way up. It violated the 50 week MA in Jan. 2010 and during the June through Sept. pullback. Recent price has not touched the 50 week MA on its last pullback so it could be seen as a stronger bottom if indeed it is in place. Stochastic on the weekly chart shows price has probably bottomed for now and would be considered oversold. MACD and Stochastic on daily are both rising although the MACD is below “0” on the daily chart. MACD on the weekly chart is just above “0” indicating improving technical activity in the stock.
On the recent pullback on the daily chart you can see the 200 day MA just below price. On the bounce price hit the 50 day MA and price pulled back a little to test itself. On the daily chart you can see, March 21st., the price action has a wide range for the day and just above average volume. They either went stop hunting for the day or tried to push prices higher and encountered some selling. The long and the short of it, pardon the pun unintended, is that there has been no real follow through selling. Price may come back and test the 200 day MA but the trend shows higher prices and a shortening of the range in price and in time in its downturns. This shorter recovery range in time and price is generally a positive for trend followers as it takes less time for trending patterns to become evident to observers.
As an investor I enjoy finding good values under book value. Recovery stories always take some time to play out and after a debacle the size of the financial crisis it is small wonder the stock price is still languishing. As an investor using technicals to time a trade I particularly enjoy it when value investors buy a stock and the patterns of accumulation and distribution become more clearly demarcated. Citigroup as a recovery story will continue to play out for some time to come and the stock price is beginning to show evidence of increased investor confidence.
