Citigroup’s shares have rallied 45% since bottoming five weeks ago. That might sound impressive, but the chart below puts it in proper perspective. As you can see, the stock has quite ways to go before long-term investors might be feeling anything close to a sense of relief.  Citi lost two-thirds of its value relative to the highs of last summer, but it would need to more than double in value from current levels just to get back to where it was. Miracles do happen, of course, but our inclination, deeply skeptical as we are of any lasting recovery in the banking sector, is to short the bejeezus out of the stock, using a penny-ante stop-loss, each and every time it rallies to a particularly juicy Hidden Pivot.

We’ve had just such a target in mind for the last week or so, and this time for a change it looks as though Citi might actually get there. Detailed trading instructions are included in the “actionable advice” section of today’s Rick’s Picks. Subscribers who were in the chat room yesterday might already be short in Apple from within pennies of yesterday’s high, since, on-the-fly, I advised naked-selling May 170 calls for a tad less than $700 apiece. The options seemed a little pricey considering the stock was trading for less than $169 at the time. But only time will tell, and I’ve recommended an 8.10 stop-loss on the calls in any event.) 

Concerning Citi, in the chart above, notice how the entire rally from the $18 low recorded in mid-March has yet to surpass even a single major peak on the daily chart. We’d need to see it get past two of them – to hit 35.30, that is – before we’d believe that the current binge might be something more than a garden-variety bear rally. Until that happens, we’ll be licking our lips every time the stock tacks on a few more dollars of mistaken value.

***

Free Chat Room Pass

The Rick’s Picks chat room is the place to be if you’re looking for tradable ideas in real time.  Gold and silver traders in particular can benefit, since the room attracts experienced traders from all over the world at all hours of the day, particularly during U.S. market hours. If you would like a free one-day pass to check it out, click here, and then on the green banner.

***

Hidden Pivot Seminar May 21-22

Because seats for the recent Hidden Pivot seminar were nearly sold out, I’ll be offering the course again in May – on May 21-22, from 6 p.m. to 9 p.m. Mountain Time.  Click here, and then on the “Upcoming” tab to register;  or here if you would like more information as well as a detailed description of the Hidden Pivot Method and a free Hidden Pivot calculator (our latest model, perfect for beginners). 

***

Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2008, Rick Ackerman. All Rights Reserved. www.rickackerman.com 

-- Posted Friday, 25 April 2008 | Digg This Article