During the recent trading sessions stock of Citigroup Inc. (NYSE:C) was gathering the crowd in the stock market. Many analysts use price trends and patterns to predict future performance, and we can glean some important insights about C by examining the chart.
How has the stock performed recently?
Citigroup Inc. (NYSE:C) in the last month has increased +1.36%. Shares are now up +43.54% over the past year, outperforming the broad market by 158.4% and outperformed a peer group of similar companies by 183%. After the latest session, which saw the stock close at a price of $67.71, C sits -3.08% below its 52-week high. Citigroup Inc. (NYSE:C) has been trading in a bullish manner, based on the relative positions of the stock’s 20 and 200 day moving averages.
Of course, these surface-level price movements don’t tell us much about the direction that C may be headed in the future. In order to predict this, technical analysts look at momentum indicators, which measure the speed and magnitude of these price movements. The idea is that as momentum slows, it may signal the approach of key support or resistance levels and a reversal of recent trends. Two such indicators are the RSI (Relative Strength Index) and the Stochastic %k Oscillator, which fluctuate on a scale of 0 to 100. A reading above 70 indicates that a stock is overvalued, and a reading below 30 implies that it is undervalued. The 20-day RSI for C is 52.82%, which suggests that the stock is not particularly expensive or cheap, and not predisposed to a reactive price movement based on this measure. The 20-day Stochastic %k measure, which sits at 28.79%, tells a different story, and suggests that C currently trades in oversold territory.
What do the trading volumes reveal?
Volume patterns are useful for gauging the level of conviction behind price changes, and can be used to make predictions about future price movements. A sudden increase in a stock’s activity can be a sign that investors are trading in anticipation of a catalyst, or that investors feel very strongly in one way or the other about the future direction of a stock. Citigroup Inc. (C) average trading volume of 13,617,715 during the past month is 23.99% below its average volume over the past year, indicating that investors have been less active than usual in the stock in recent times.
What do the analysts think?
C is currently undervalued by -6.66% relative to the average 1-year price target of $72.54 taken from a group of Wall Street Analysts. The average investment recommendation on a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell) is 2.40, which implies that analysts are generally neutral in their outlook for C over the next year.
How risky is the stock?
In order to put C’s recent price performance into context, we need to get a sense of how the stock moves in relation to the overall market. Beta, which measures a stock’s price volatility relative to the market, provides the cleanest measure of systematic risk for a stock.
Citigroup Inc. (NYSE:C) has a beta of 1.45, compared to a beta of 1 for the market, which implies that the stock’s price movements are more extreme than the market as a whole. C therefore has a above average level of market risk. During the past couple of weeks, C average daily volatility was 17.46%, which is 0.2 percentage points lower than the average volatility over the past 100 days.