Hope everyone had a fantastic weekend. I apologize for the lack of posts last week. I was extremely busy with some other work, but I have this morning’s article for you. Then, around lunchtime I am going to send a Buy Pick of the Week in an Oxen Alert for all Alert Members and Premium Members. Today, we start with a Buy Pick of the Day, however. With the market looking to fall significantly after the weekend news of Goldman Sachs, the volcanic eruption, and China commenting it was going to try to curb real estate investment speculation.
Let’s get into the pick…
Buy Pick of the Day: Citigroup Inc. (C)
Analysis: Futures are down over 140 points as of 8:50 AM. The market is looking to open significantly lower due to the Goldman Sachs civil lawsuit and a volcanic eruption that is choking the European markets. World markets got slammed today with the Asian markets dropping 1.5% – 2% and the European markets down just over 0.5%. It does not look like a "green" day by any means. Yet, one thing we do know is that the market is going to open down very low. Will it have too much farther to go to the downside?
I think it will move somewhat more to the downside, but the combination of testimony of Ben Bernanke and some really solid earnings coming out of big names like Halliburton, Citigroup, and Hasbro should give some weight to neutralize a market free.png)
fall. That is why I like Citigroup. The company, following in the footsteps of Bank of America (BAC) and other JPMorgan Chase, reported very solid Q1 earnings. The company was projected to report an EPS of 0.00, but it beat that by 15 cents. The company had a very profitable quarter and is looking strong.
This big gain of over $4 billion comes after a nearly $700 million loss one year ago. The company cited that their loan virtual portfolio was the strongest it has ever been, and the company was excited about the long term future. CEO Vikram Pandit, however, remained somewhat solemn on the issue of future growth.
A profit was not expected, though, for Citigroup. Further, the stock has not risen significantly in the pre-market trading due to the Goldman issue, which means this is a perfect buy. I am expecting C to get flooded with buyers and government selling. The demand for the stock is going to be very high today and throughout the day. As this slowly creeps up, more buyers are going to rush to the winners for the day.
Technically, Citigroup had a major pullback at the end of last week to allow it to have some room for growth today. The stock dropped almost 10% over the past few days of last week after moving outside of its upper bollinger band. It now has been a bit oversold and moved down under its upper bollinger band. This movement allows the stock to create some new buyer interest as it is not overweighted. The low gains in the morning should help to provide a large intraday movement.
Get in early before it gets away but watch for a small drop in the morning to start the first couple minutes.
Entry: We are looking to enter at 4.50 – 4.60.
Exit: We are looking to exit for a 2-3% gain.
Good Investing,
David Ristau
