Citigroup Inc. Stock Market Research. Several Trading Ideas

Citigroup Inc., #C [NYSE]

Finance, Banks, USA

Citigroup Inc. is the largest international financial conglomerate, which occupies a leading position in the field of financial services. The company was established on April 7, 1998, as a result of the merger of Citicorp and Travelers Group. Citigroup Inc. is the primary dealer of US Treasury securities and manages assets worth more than $1.9 trillion.

Source: finviz.com
Financial indicators of the company:
  • Index – S&P 500;
  • Market Cap – 154.23 B;
  • Income – 17.00 B;
  • P/E – 9.49;
  • Beta – 1.81;
  • ROA – 0.90%;
  • Avg Volume – 13.90 M;
  • ATR – 1.52.
Analytical review:

This year, Citigroup Inc. took a leading position among companies in the financial sector. Since the beginning of 2019, stocks have grown by more than 30% compared to a 19% increase in the S&P 500 index.

In mid-October, the company will report for the 3rd quarter of 2019. Analysts forecast a rather optimistic release of the financial giant from Wall Street. Citigroup Inc. is expected to receive a profit of $1.95 per share (EPS) compared to the same period in 2018 at $1.73 per share. The company's revenue will be $18.51 billion, which is more by 0.7% in the same quarter last year.

Investors will also monitor whether Citigroup Inc. will continue its aggressive share buyback and dividend payment program. At the moment, the dividend yield of the financial conglomerate is 2.76%. For comparison, the average yield of the S&P 500 is at 1.96%. Vanguard Group, Inc. (8.13%); Blackrock Inc. (7.03%); State Street Corporation (4.57%) are #C's main institutional investors.

The bank margin in the current quarter, especially due to the reduction in the Fed interest rates, will be another key point for investors. At the moment, most of the financial market participants expect further easing of monetary policy this year. Growing geopolitical tension, as well as a trade war between the US and China, put additional pressure on shares of Citigroup Inc.

Analysis of financial indicators and company multiples points to the possibility of further growth of the #C quotes.

Trading Recommendations for Citigroup Inc. Shares
  • Support Levels: 68.65, 67.55, 65.90
  • Resistance Levels: 70.00, 70.70

Last two weeks, Citigroup Inc. shares have been trading in flat. Unidirectional trends are not observed. At the moment, the following key support and resistance levels can be identified: 68.65 and 70.70, respectively. Indicators do not give accurate signals:

  • – The price has crossed 50 MA and 100 MA;
  • – The MACD histogram is near the 0 mark.

We recommend opening positions from the key levels.

If the price fixes below the support level of 68.65, a technical correction of #C quotes is expected. The movement is tending to 66.50-65.00.

Alternative option. If the price fixes above 70.70, the company's shares may continue the global uptrend. The immediate goal for profit-taking is 72.50. When tracking positions, we recommend using a trailing stop.

by JustMarkets, 2019.09.30

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