Citigroup - (C) - April 23, 2024

Coming off of their earnings season, big US banks have been climbing their way up relative strength rankings tables, and in many cases, moving up into the Green Favored Zone. Citigroup (C), for example, returned to the Green Favored Zone of the SIA S&P 100 Index Report, for the first time since June of 2021 after climbing 4 spots yesterday and 9 positions in the last month to 26th place, joining Wells Fargo (WFC) and JPMorgan Chase (JPM) in the top tier of the report. Movement within SIA Charts relative strength rankings tables can help to identify stocks which are underperforming or outperforming relative to their sector peers or their broader universes. During the 2½ years Citigroup spent stuck in the red zone, its share price fell by 24.2%, compared with a 9.1% gain for the S&P 100 Index Report over the same time period. Citigroup climbed out of the red zone into the yellow zone right near the end of 2023. Year to date, Citigroup is up 19.6%, while the S&P 100 Index is up 6.0%.

One of the useful features of SIA Charts is that clients have the ability to directly compare relative strength with price action. Using the Report Overlay feature we can see that back in mid-2021 the shares fell out of the Green Favored Zone in the SIA S&P 100 Index Report about the time that the shares peaked. Since November, Citigroup has been under renewed accumulation. First, it climbed back above its 10-week moving average and has remained above it since. Then it snapped a downtrend line and completed a bullish Falling Wedge pattern. A breakout over $50.00 round number resistance coincided with the shares exiting the red zone and returning to the yellow zone. Last week in a correction, the shares successfully retested support near $57.00, a previous resistance level that has reversed polarity, and with yesterday’s bounce it has returned to the Green Favored Zone. Next potential resistance appears at previous highs near $65.00 and $71.50.

A new uptrend is clearly underway in Citigroup (C) shares. Last fall, a 2½ year downtrend bottomed out near $37.50. In December, the shares broke out of that downtrend and have not looked back since. An initial recovery rally was followed by a minor 3-box correction, and then another breakout which completed a Bullish Catapult. This month, the shares have paused between $55.90 support and $64.20 resistance to consolidate their gains but the formation of a symmetrical triangle of higher lows and lower highs suggests underlying accumulation remains intact. Next potential upside resistance appears near $72.30, where the June 2021 peak and a horizontal count converge, then $78.25 based on a vertical count. Additional support appears at previous lows and $52.65. With a bullish SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) of 9 out of 10, C is exhibiting short-term strength across the asset classes.