• Citigroup shares post 28-month high ahead of earnings

• Short-term oscillators are within overbought territories

• There is high risk of a correction in case financials dissapoint

   

Citigroup’s stock has been staging a V-shaped recovery since its 2023 bottom in October, posting consecutive multi-month highs. After two months of rangebound trading, the stock posted a fresh 28-month peak of 66.70 on Wednesday, two days ahead of its Q2 earnings release.

Should the rebound extend further, the February 2022 resistance of 69.00 could prove to be a tough hurdle for the price to overcome. Conquering this barricade, the bulls might propel the stock towards 71.20, which is the 78.6% Fibonacci retracement of the 80.22-38.07 downtrend. Higher, we could potentially see a test of the August 2021 high of 74.50.

On the flipside, should the recovery falter, initial support could be found at the 61.8% Fibo of 64.12. A break below that region could open the door for the 50.0% Fibo of 59.15. Further retreats could then pause at the 38.2% Fibo of 54.17.

In brief, Citigroup stock’s rally has been very strong, but the momentum indicators have started to warn of an overstretched advance. Therefore, the outcome of Friday’s report will most likely decide the stock’s next move.