Citizens Financial Group (CFG) was downgraded today by theStreet.com's quantitative service so naturally I took a look at the charts and indicators. It looks like this downgrade could be just enough of a nudge to tip the charts to the downside.
Let me show you.
In this daily bar chart of CFG, below, we can see how prices have weakened since the late February/early March zenith. Prices have made lower highs the past four months. Prices have held the $34-$33 area the past three months, but that support may give way. Prices are stuck right now between the nearly flat 50-day moving average and the rising 200-day moving average line. A test and possible break of the 200-day line looks highly likely in the next few weeks, in my opinion. The daily On-Balance-Volume (OBV) line looks like it peaked in February with price and has been declining. A declining OBV line happens when the volume of trading is heavier on days when it closes lower. A downtrending OBV line tells me that sellers of CFG are more aggressive. The Moving Average Convergence Divergence (MACD) has been crisscrossing the zero line and is now moving to a new sell signal.
In this weekly bar chart of CFG, above, we can see that prices are above the rising 40-week moving average line but it looks like this line could be tested soon. The weekly OBV line is flat and on this time frame appears to be more neutral. The weekly MACD oscillator is in a take profits configuration above the zero line but it could move below the zero line in the weeks ahead.
Bottom line -- a close below $33 on CFG will put the bear in control and tells us that this quantitative downgrade was timely. It will take a couple closes above $38 on increased volume to bring the bull back.
