Chart Analysis: Can closing branches and lying off employees be good for your stock? This is the focus of today's NinjaTrader and Mr. Topstep Chart of the Day. Citigroup ($C) announced yesterday that they are going to lay off 11,000 jobs and shutdown branches around the world and the stock jumped up to close at $36.46; a 6.3% jump from the prior close. Although traders are temporarily happy with the news, as the plans are estimated to save over $1 billion in expenses for the company, will it be enough to save the bank?
The daily Citigroup ($C) prices are plotted above including several studies from the over 100 free indicators included in NinjaTrader. VolumeZones have been applied on the left of the chart showing us where large volume price areas are located and we can see that the consolidation between $25 and $28 has had the largest volume activity. Price has had trouble breaking the $38 level to the upside with 3 failed attempts; however the VolumeZones shows low volume in this area which may show potential for a break to the upside. We also see the VolumeUpDown study below price showing the large buying volume brought in by the news of the layoffs.
Price is nearing the $38 resistance level again and it will be interesting to see if there is enough strength to finally get above this price point. Although this temporary strategy for Citigroup may work in the short run, there may be longer lasting effects on the economy as 11,000 people will now be looking for new work in an already high unemployment environment.
Today's chart can be created for free using the NinjaTrader 7 software powered with free end of day data from Kinetick.
MrTopStep, its officers, and directors are not agents, representatives, or affiliates of the CME Group. Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Any decision to purchase or sell as a result of the opinions expressed in these report(s) will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.