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This Citigroup Chart Shows the Stock Has Some Support: Market Recon

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Citigroup Charts I really just placed this first chart here in order to illustrate how deep and lengthy the overall trend has been for Citigroup (C - Get Report) . There have been stutter steps, and some sideways movements that lasted for weeks at a time, but the positive momentum here goes back to the start of 2016, well before the election or the inauguration.

The reasons for which I have liked C for some time now are largely fundamental. Yes, I know that Societe Generale downgraded these guys fairly recently. I am still looking at a stock trading 12 times next year's earnings in an industry likely to benefit from the potential of a rising rate environment, with a bounty of international exposure to boot.

OK, let's take a look under the hood, and see what a more relevant chart can tell us.

You can see on this nine-month daily chart that the stock has gone sideways within a defined range since that earnings release in early October. Currently, the lower tine of the Pitchfork model lines up almost perfectly with the 50-day simple moving average. This is where you better find some legit support, if there is pressure on this name on Monday.

A break here allows for movement as low as $69. The central tine and the recent highs both suggest resistance at $76. The same model also suggests an $80 price target. In my opinion, that is realistic, and I do not yet see a more aggressive level higher than that.

In the stock's favor would be a moving average convergence divergence (MACD) that appears to be about to experience a bullish crossover. Witness the 12-day exponential moving average.

Monday morning's opening will impact that upward curl, and probably not in a good way. Money flow has turned negative over the last week or so. If you are invested, you need to keep an eye on this. My panic point for the name is $65.90.

(This is an excerpt from Stephen "Sarge" Guilfoyle's Morning Recon, which now appears exclusively on Real Money, our premium site for active traders. Click here for a free 14-day trial and receive Morning Recon every day, along with exclusive columns from Jim Cramer, James "RevShark" DePorre, technical analyst Bruce Kamich and more.)


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