Citigroup Inc (US: C) Downside sub-corrective is heading for a reversal after recent technical indicate a potential upside. However, we believe that the larger correction is not yet over:
- Citigroup has briefly broken out of the falling wedge formation yesterday, which is a good indication of more bullish upside to come.
- The smaller inverted head and shoulder formation is preparing to stage a breakout to the upside. If US$70.00 able to break, we could see a stronger upside confirmation.
- The RSI is showing double bullish divergence; hence we are able to see a strong upside.
- Although prices are trending below the 63-period moving average, the above-mentioned price action indicate that there is a high probability of reverting to its mean at 63-period.
*Expected timeline of the trade is 12 weeks from the date of report issuance.
CHART LEGEND
Moving Average
Red dotted line = 200 periods MA
Blue dotted line = 63 periods MA