I am a little concerned about the "buy on the rumor, sell on the news" aspect of the next week. I am also concerned about options expiration on Friday. HOWEVER, I believe C will be trading over $5 before you know it. I believe Citigroup will announce excellent 1st quarter earnings a week from today.
I am putting my money where my mouth is. I sold my remaining June $4 calls and bought June $5 calls. (over 1000 contracts) Also, I kept some of the profit. I did not sink everything into the June $5 calls. (I am getting a little smarter in my old age!)
Here are some other reasons why C goes higher: (updated)
Paulson added to his position in the 4th quarter
Soros started to buy in the 4th quarter
Citigroup has $750 billion in cash.
Citigroup is undervalued based on its book value. (about $5.35)
Hedge funds bought 10 times more C in the 4th quarter than they sold.
There is still the possibility that Citigroup will buy back some or all of the US Government shares.
CITIGROUP IS A BANK, THEY BORROW FOR NEXT TO NOTHING AND THEY MAKE LOANS FOR A MUCH HIGHER INTEREST RATE!
There is a feeling in the air (today 4/4) that C is going much higher in the short term. (I originally posted this when C was about $3.45.)
Pandit did well before Congress on 3/4/10.
Cramer believes few stocks "offer as much upside" as C, especially after the government "starts unloading its Citigroup holdings". ("Mad Money" 3/5/10)
C must have broken one or the other of those moving averages!
Citigroup priced a preferred offering, (3/9) and the market "loved it".
"Bullish comments from several different sources" (In mid-March)
Pandit made a great presentation on 3/11/10.
Dick Bove (the analyst) on 3/19/10 stated that he believed C will double to $8.50.
1st quarter earnings will be announced in mid-April. I believe they will beat expectations.
On 3/25 Citigroup signed up for loan modification program. (for homes)
C has not gone up over 23% since March 3rd ($3.40 to $4.18) for no reason.
The details have been released in regard to the Morgan Stanley/US Government/Citigroup sale of C shares.(3/31)
The 2nd quarter has begun.
The government released excellent employment figures on 4/2.
Anticipation of 1st quarter earnings (announced on 4/19)
C IS THE LEAST EXPENSIVE BIG BANK STOCK, BY FAR.
(Not that it matters, but C closed at $2.69 on 7/27/2009 and C closed at $5.23 on 8/28/2009.
Different times, I know, but if it could happen once.................................)
Congrats on some great trades! I agree with your analysis and have loaded up on June5's. Also May/Sept5's as well. I did buy some May4Puts as protection but won't mind a bit seeing them at ZERO. I learned years ago to buy some put protection but I agree that Citi will see 5.00 in the very near future. Good job Bill and keep the analysis coming.....
I took some money off the table, however I believe the (my) June $5 calls will soon be in the money. I am concerned about options expiration on Friday, however I believe that excellent 1st quarter earnings will be announced on Monday. I believe that great earnings = $5+.
We shall see....