Update to Citigroup (C) Trade Recommendation

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Citigroup (C) stock performing strong since buy recommendation

Since I recommended buying Citigroup (C) stock at $49.95 on 11/14, shares are up 6.7%. The option spread I set up for a $.75 debit can now be sold for a $3.65 credit. Looking at the chart, Citigroup has reached a key level at this multiple top and I think now would be a good time to take some risk off on our position, while at the same time increasing our time horizon. Despite C stock already being up 35% year to date, I still think it will continue higher, however the Stoch indicator shows shares are in the overbought range and RSI is trending above 70, so I think we are due for a slow down for a few sessions.  Ichimoku is still very bullish as is the MACD. I predict shares of Citigroup reach $55 by January and $60 by March. The following long mock butterfly trade is a nice setup for the coming months.

The Trade:

  • Sell 1 Jan $50 call to close
  • Buy 2 March $55 to open
  • Sell 1 March $57.5 to open
  • $1.17 credit

This will allow you to collect some profits from the original trade, while at the same time staying long the stock until March and adding some downside protection by selling the $57.50 call.

Disclosure: I am long March $50 calls

One Response to Update to Citigroup (C) Trade Recommendation

  1. Update on my disclosure. This morning I sold 1 March $50 call, Bought 2 March $55 calls and sold 1 march $57.50 call for $1.95 credit

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