Technical analysis

Two stocks to watch: week 2, 2024

By Antreas Themistokleous

09 January 2024

two stocks to watch week 2

It’s shaping up to be an exciting year for stock traders, and two huge companies are showing up on the opportunity radar already. Let’s take a deep dive into Citigroup and Wells Fargo & Company.

Citigroup, Inc

Shares in Citigroup, Inc (C) had a remarkable bullish rally in the last month of 2023 and managed to close the quarter with a 25% positive increase. The company is expected to release its earnings report for the quarter ending December 2023 on Friday, January 12, before the market opens. The consensus estimate for earnings per share is $1.06, compared to the result for the same quarter last year of $1.11.

Citigroup wants to get more involved in China's financial markets by starting a new investment banking unit, even though some other US banks are being careful due to issues like political tensions and a slower economy. Foreign banks, including Goldman Sachs and JPMorgan Chase, have struggled to gain traction in China's IPO market, mainly because of growing tensions between Washington and Beijing and increased government intervention in the financial sector overall.

On the technical side, the price has slowed down from the bullish momentum around the resistance area of the 38.2% of the weekly Fibonacci retracement level and the upper band of the Bollinger Bands, which acted as a strong resistance level. The 50-day moving average is trading above the slower 100-day moving average, while at the same time the Stochastic oscillator has been in the extreme overbought area for a prolonged period of around 2 months, possibly indicating a correction to the downside in the near short term before resuming the overall bullish trend.

Wells Fargo & Company

Wells Fargo & Company (WFC) share price rose by around 23% in the last quarter of the year and managed to cover the losses incurred in the second half of the previous quarter. The company is expected to report its earnings for the fiscal quarter ending December 2023 on Friday, January 12th, before the market opens. The consensus EPS for the quarter is $1.18 compared to the result for the same quarter last year of $0.67.

The bank had an impressive year in terms of net income, with the latest data as of September 30, 2023, showing a 64.5% increase year-over-year. On the other hand, the current ratio of the company stands at just shy of 90%, indicating that there is no ability to repay short-term liabilities with the current assets at hand. On a positive note, the dividend yield is at 2.57%, which is within the average yield of major banks in the USA.

From the technical analysis perspective, the price lost some steam in the last days of 2023 and entered a trading range between the $49-$50 area, which is still valid as of the date this report was written. The $50 price area is a rather strong technical resistance level, consisting of the psychological resistance of the round number as well as an inside resistance area tested back in April 2022. The Stochastic oscillator is not recording any overbought or oversold levels, hinting that the price can move in either direction, while the faster-moving average is trading above the slower one, further validating the overall bullish momentum.


This is not investment advice. Past performance is not an indication of future results. Your capital is at risk, please trade responsibly.


Author:

Antreas Themistokleous
Antreas Themistokleous

Antreas Themistokleous is a trading specialist in Exness. He is a Certified Financial Technician since 2018. As a member of the Society of Technical Analysts, Antreas is implementing advanced use of indicators and patterns to conclude in an action plan for different trading strategies.