Citigroup Stock Is Wandering in No-Man’s Land

Citigroup Stock Is Wandering in No-Man’s Land

Editor's note: This column is part of our Best Stocks for 2014 contest. Greg Harmon's pick for the contest is Citigroup (C).

It is halfway through the year, and the prospects for Citigroup still aren’t looking good.

Recall at the end of the first quarter that the stock price had recovered from a failed breakout and held at the bottom of the support range near $46. Then I suggested Citigroup was a stock to look at occasionally, but not worth buying unless it moved out of the range to the upside, and possibly a stock to trade on the short side below the range.

Citigroup stock did fall below the range in early April, but only for a day, before recovering back into the range. That breakdown was a technical signal to buy, but even that petered out after a week.

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So Citigroup’s stock price remains in no-man's land, stuck between $46 and $54.

The economy has not created any inflation to date, which is what Citigroup needs to see a rising yield curve and better prospects for growth. But to the close observer, it has actually gotten even worse.

The technical analyst would look now and see that all of the price action (outside of three weeks in 2014) has been below the 200-day simple moving average, as noted in the red box. This is in major contrast to the last six months of 2013, where C shares always were above this line.

This is what makes the picture more bearish going forward. Citigroup still is in a zone where there’s no edge to trade or invest either way. If you do keep C stock on your radar, then your focus should be on the short side for now.

In the Best Stocks for 2014 contest, which looks at a stock’s performance throughout all of 2014, I am still “long” the stock, so I am resolved to bringing up the rear unless one of the other stocks encounters some kind of accounting scandal.

Good thing that stop-loss kicked off in the real world back in early January.

As of this writing, Greg Harmon did not hold a position in any of the aforementioned securities.