Monday, August 2, 2010

Citigroup Wedging Higher, Volume still Low (C)

The stock is up a dime (2.32%) at $4.20. As we said in Thursday's "Citigroup Support and Resistance Levels July 29, 2010 (C)":
...Citi has been levitating on low volume from $3.85 and I would expect the gap from yesterday's $4.09 close to be covered before we see any sustained ascent....
The gap was indeed covered with the stock trading down to $4.06 before resuming the upmove and closing at $4.12.

The ascending wedge on declining volume pattern is prone to failure, keep stops tight. A one or two percent shakeout may make you feel like a moron if you end up buying back higher but it beats the heck out of a 10 to 15% decline which is possible with earlier downmoves ending at $3.85, $3,62 and $3.53 with $3.53 being the highest volume support.

Here's the YTD chart from BigCharts: