Shares of Citigroup (C) have outperformed major equity benchmarks in 2024, with a 22% year-to-date gain compared to the S & P 500’s 13%. However, a detailed technical analysis review using multiple time frames suggests a possible downside reversal. The weekly chart displays a significant and consistent rise in Citigroup from an October low of $38 to a recent peak at $65. Key indicators, such as the weekly PPO and moving averages, signaled a new uptrend, but recent developments indicate a potential shift in momentum.
In February 2024, Citigroup surpassed the 150-week moving average, confirming the strength of the uptrend. However, reaching a 61.8% Fibonacci retracement level, along with a sell signal from the weekly PPO indicator, suggests the end of the previous uptrend phase. Similar signals in the past have preceded market tops. The weekly RSI reaching its highest level since 2021 further supports the possibility of a downside reversal.
The daily chart provides a clearer view of the price dynamics leading to the $65 level. A bearish momentum divergence, with higher price highs and lower RSI values, indicates weakening upside thrust, often seen at major market tops. Monitoring the RSI’s behavior around the 40 level is crucial, as a break below it could signal a shift in momentum towards a new bear phase for Citigroup.
Citigroup recently broke below its 50-day moving average for the second time in 2024, signaling a potential exhaustion of the previous uptrend phase. The relative strength indicator shows underperformance compared to the S & P 500 over the last four weeks. Failure to reclaim the 50-day moving average could further confirm the weakening trend.
Considering the bearish signals and technical patterns, a potential downside target for Citigroup is around the April low of $57, aligning with a previous swing high from late January. This level could act as a magnet for price action, with a possible bounce expected upon reaching it. The overall technical outlook suggests that Citigroup may be experiencing upward exhaustion, leading to potential downside risk.
The technical analysis of Citigroup stock in 2024 raises concerns about a possible downside reversal. Key indicators, such as moving averages, RSI, and relative strength, indicate a weakening trend for the stock. Investors should closely monitor price movements and key support levels to assess the potential risk of a bearish phase. The information provided is for informational purposes only and does not constitute financial advice. Before making any investment decisions, consult with a financial advisor to assess your individual circumstances.