Stock to Watch – Citigroup
Mar 12, 2010 Stock to watch, Stocks On The Move
Citigroup’s (C) beleaguered stock, which has severely under-performed the broader markets, has been on a tear (relatively speaking) the past four days. The stock has advanced from a close of $3.50 on March 5, to a close of $4.18 on Thursday March 11, with a higher close each day.
On Tuesday, the stock rallied 7.9% from $3.55 to $3.82 on no apparent news. On Wednesday, the stock extended its gains after the company priced some Trust Preferred Securities or TruPs, that were very well received.
While Citigroup offered only $2 billion worth of the securities at an initial rate of 8.875%, demand was so strong, with orders for the securities exceeding $5 billion, that Citigroup lowered the interest rate to 8.625% and then a final rate of 8.50%.
This suggests that the worst might be over for the bank and as a results, investors are buying the shares.
In a strong market, Citigroup shares are a buy. However, traders need to be cautioned that the stock is now right up against resistance. So while new buyers might be coming in, with the recent rally in the stock, which would send the shares higher, we may also see some pull back on some profit taking.
Tags: citigroup
