Citigroup Inc. (C) announced Thursday a workforce cut targeting investment-banking staff. Let's check out the charts and indicators of the money center bank to see if this is a positive development for shareholders.
In the daily bar chart of C, below, I can see a less than convincing chart picture. The shares are above the rising 50-day moving average line and above the bottoming 200-day moving average line but trading volume has been neutral from September. If C was making a base pattern we should see trading volume increase as the pattern matures and investor interest and conviction increases.
The daily On-Balance-Volume (OBV) line shows a modest rise from late December. The Moving Average Convergence Divergence (MACD) oscillator has weakened in February but is still above the zero line.
In the weekly Japanese candlestick chart of C, below, I also see a less-than-convincing chart story. Prices are trading above the bottoming 40-week moving average line but an upper shadow on an early February candle tells me that traders have rejected the upside.
The weekly trading volume shows a weakening pattern from last March. The weekly OBV line has been on a downward path from May 2021 suggesting a long period of liquidation (selling). The MACD oscillator is hugging the underside of the zero and narrowing.
In this daily Point and Figure chart of C, below, I can see a downside price target in the $48-$47 area. This is not a big downside but the direction is more important at this point in time.
In this weekly Point and Figure chart of C, below, I can see a potential upside price target in the $70 area. A trade at $42 will weaken this chart.
Bottom-line strategy: I worked at C (Smith Barney) some 20 years ago and found it to be a slow-moving organization so I won't be surprised if there are more layoffs coming. The charts currently suggest we could see some price weakness in the near-term. A better buying opportunity may lie ahead.
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