C surges $1.44 (2.11%) after posting strong earnings

Overview

C ended the week -3.59% lower at 69.82 after surging $1.44 (2.11%) today on high volume, outperforming the S&P 500 (1.42%) following today's earnings report. This is the biggest single-day gain in over three weeks. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.

Daily Candlestick Chart (C as at Oct 12, 2018):

C reported earnings of $1.62 per share before today's market open. With analysts having expected an EPS of $1.66, Citigroup Inc. surpassed market expectations by 4.8%. The company's last earnings report was released on July 13, 2018, when Citigroup Inc. reported earnings of $1.62 per share beating market expectations by 4.5%.

Friday's trading range has been $2.82 (4.0%), that's far above the last trading month's daily average range of $1.48. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for C.

One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.

After trading down to 68.41 earlier during the day, Citigroup Inc. bounced off the key technical support level at 68.60 (S1). The failure to close below the support could increase that levels importance as support going forward. Prices are trading close to the key technical resistance level at 70.37 (R1). After having been unable to move lower than 68.36 in the previous session, the stock found buyers again around the same price level today at 68.41. The last time this happened on Tuesday, C actually lost -2.70% on the following trading day.

Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and might now be heading back up towards the mean of the Bollinger Bands at 72.16.

The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.

Trading close to August's low at 68.08 we could see further downside momentum if potential sell stops at the level get triggered.

Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Stock Earning Report based market condition "Trading Day post strong Earnings Report" stand out. Although it is usually interpreted as neutral, it has actually shown to be bullish for Citigroup Inc.. Out of 21 times, C closed higher 61.90% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 76.19% with an average market move of 1.23%.