DailyPlay – Citigroup Inc (C) – January 25th, 2022

View C Trade

The bullish DailyPlay for Tuesday, January 25th is Citigroup Inc (C). C is part of the Financial sector that has experienced a strong pullback in recent days providing a good entry point. 

Please note this trade is a call diagonal trade which represents a longer-term bullish outlook. The aim for the short leg of the trade is to let it expire worthless or roll it closer to expiration for a minimal cost. This allows us to consistently receive income that offsets the premium paid for the long leg which eventually leads to a reduced cost basis and breakeven price.

Technical View

• Deep pullback after a strong rally in recent weeks provides a much better risk/reward bullish entry for long-term exposure. 
• Neutral Technical Score that is expected to improve
• Short-term momentum has approached oversold levels. This provides evidence that a rebound is likely. 

Fundamental View

• Positive outlook on the banking industry that will likely benefit from growing yields and increasingly hawkish Fed.
• Citigroup’s restructuring in exiting the consumer banking space in Mexico as well as the ongoing disposition in retail banking in the Asia Pacific region allows for a more streamlined model and releases equity capital to be deployed in other areas. 
• Earnings: Apr 14, 2022 (79 days)