Buying Bank Stocks Now?

[Mango]

I could kick myself when the little voice in my head said to buy Citicorp at .97. and didn't make the trade.

Now it's up to 1.86. I still think in the long term this is a good buy, but I may wait till next week because some announcement will spook the markets and we may see a tick downward. I think Citi is just too large to let fail.

Ok, you market watchers....what is your stance?

 

[TooFarTampa]

I thought market timing was easy.

 

[Mango]

I thought market timing was easy.

Yes, I seemed to read that somewhere. My crystal ball is broken, though!!

Actually, I would have done it, but I opened up an online trading account since I am tired of paying my broker, top dollar, for my own stock selections. I do not mind paying more for something introduced to me that I was not aware of it and has been well researched. The account wasn't fully completed yet.

 

[30ashopper]

I could kick myself when the little voice in my head said to buy Citicorp at .97. and didn't make the trade.

Now it's up to 1.86. I still think in the long term this is a good buy, but I may wait till next week because some announcement will spook the markets and we may see a tick downward. I think Citi is just too large to let fail.

Ok, you market watchers....what is your stance?

I rummaged around with the same thought Mango. However, Citi sold a bazillion shares to avoid failing the stress tests a while back, which diluted their common stock like 75%. If they rallied back to where they were at the height of the bubble the stock would go to 14.00. The odds of Citi rallying back to that level are slim to none.

It's still a nice play but very risky. If I bought it today (and I'm not, I'm in MS which is much safer imho) I'd definitely set a stop on it as I'd bet they'll be back to 1.00 (or even maybe 0.00) before this is all over.

 

[traderx]

I could kick myself when the little voice in my head said to buy Citicorp at .97. and didn't make the trade.

Now it's up to 1.86. I still think in the long term this is a good buy, but I may wait till next week because some announcement will spook the markets and we may see a tick downward. I think Citi is just too large to let fail.

Ok, you market watchers....what is your stance?

Are you looking to trade or hold long term?

 

[traderx]

I thought market timing was easy.

Now, now. Play nice....

 

[TooFarTampa]

Now, now. Play nice....

Just humor among friends. I'll go back to trying to win something on ebay now.

 

[Mango]

I rummaged around with the same thought Mango. However, Citi sold a bazillion shares to avoid failing the stress tests a while back, which diluted their common stock like 75%. If they rallied back to where they were at the height of the bubble the stock would go to 14.00. The odds of Citi rallying back to that level are slim to none.

It's still a nice play but very risky. If I bought it today (and I'm not, I'm in MS which is much safer imho) I'd definitely set a stop on it as I'd bet they'll be back to 1.00 (or even maybe 0.00) before this is all over.

I do not think it will rally back to that level anytime soon. But you have to admit, for a long position, less than 2 dollars a share for a major global Bank is a bargain. I know this may be a naive position.

Are you looking to trade or hold long term?

I'm not a day trader. But, had I bought it, I may have just decided to take my profits now and repurchase more later. It's all so confusing, and I am not in a gambling mode right now.

 

[traderx]

C is now a penny stock. There is a tendency when share price gets this low to believe you cannot lose much money. Consider if you buy C at 1.80 and it falls back to 0.97. You will have lost half your money.

Below is a six month log graph of C. I plotted price as candlesticks along with Bollinger Bands. You may have seen John Bollinger on CNBC. The dotted line in the middle of the bands is the 20 day simple moving average of C. The upper and lower bands represent two standard deviations above and below the 20 day SMA.

Note that when price hits the lower band, it tends to reverse and move higher. As C has descended, note that when it tries to forge a rally, it has turned back down from the 20 day SMA. Note that price is right on its 20 day SMA as of the close yesterday. Will C be turned back by the market or will it continue to rise from here? No way to tell but my advice would be to wait and see the price action today at a minimum.

I hate to offer advice to non-traders because before I enter a trade, I know when I will get out. If you buy C have a stop loss in mind and observe it.

 

[traderx]

Well apparently Stockcharts.com does not like free advertising so they prohibit remote images.