Shares of Citigroup are up almost 35% over the past year, and while they haven't done much in 2017, that's because they've spent all year setting up a pretty textbook example of a bullish continuation pattern.
In other words, Citi could be setting up a second leg higher.
The pattern to watch in Citigroup is an ascending triangle setup, a signal formed by horizontal resistance up above shares at $62, and uptrending support to the downside. Basically, as Citi has pin-balled between that pair of technically important price levels all year long, shares have been getting squeezed closer and closer to a breakout through our $62 price ceiling. When that happens, it's time to join the buyers.
Relative strength adds some extra confidence to the upside potential in Citigroup right now. That's because, unlike its peers, Citi's relative strength line has been holding onto higher lows, signaling that Citi continues to outperform the rest of the stock market, even now.
Once shares materially clear $62, Citi is a buy.
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