The financials are one sector that I admittedly stay away from. It’s not that they haven’t performed well enough to garner my interest, it’s just that there’s still an unsettled feeling to the group. From rogue traders to manipulation to lawsuits to government involvement, it all just doesn’t suit me. And Citigroup (C) did a good job of reminding me of this as they announced that they are adjusting their 3Q earnings downward to account for legal costs.
This news comes at an interesting ‘time and price’ juncture for Citigroup’s stock. In April of last year, I highlighted the wide ranging long-term ascending triangle that has formed off the 2009 lows. Well, it’s still there. And time and price appear to be converging by way of the uptrend support line pressing up closer to the overhead resistance line. See chart below.
Citigroup (C) Weekly Chart
It will be interesting to see if today’s announcement actually hits the stock. Or on the contrary, if the stock can shake it off and continue to move higher.
Either way, I’m guessing that surprises like this will keep active investors at arms length of select financials.
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No position in any of the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.