-- Posted Tuesday, 18 November 2008 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
Tuesday, November 18, 2008
“Phenomenally accurate forecasts
We may have to raise the odds that Citigroup will survive the collapse of the banking industry. Clearly, any firm that can lay off 75,000 employees is gearing for survival in tough times. “We will be the long-term winner in this industry,” vowed CEO Vikram Pandit. Who could doubt such resolve? Even so, when the layoffs already announced have taken effect, the bank will still have 300,000 workers. That’s not exactly running lean and mean, but it would appear Pandit has left the door open for even more job cuts. “There is still a lot of rebalancing ahead of us,” he told employees at a closed meeting yesterday. “The coming year could be a difficult one for our clients and customers.”
Citi shares have been falling relentlessly for 18 months, but they still have at least a little ways to go, according to our technical runes. The stock hit a 12-year low last week when it touched 8.27, but we’d be inclined to bottom-fish just a bit beneath it -- at 7.09, a Hidden Pivot support. Were the stock to reverse and hit 11.21 first, signaling a bullish “impulse” on the hourly chart, that would suggest that the recent bottom at 8.27 might turn out to be an important one. If so, it would hold bullish implications not only for financial stocks, but for the stock market in general, since bank shares have been a reliable bellwether for some time.
How does that square with our prediction that the shares of Goldman Sachs, currently selling for around $62, will eventually trade for $29? Our guess is that Goldman would get a reprieve if Citi stops falling. But the hard choices Citi has been making still lie ahead for Goldman, whose global infrastructure continues to reflect the opportunities of a financially leveraged world that has ceased to exist. In that respect, Goldman may be more of a dinosaur than Citi. Accordingly, we’re sticking with the $29 prediction unless the stock pops to $162. A 250% increase in the price of the stock may sound like a tough benchmark, but anything less than that would probably be just noise.
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Last Seminar in 2008
Because the November 5-6 Hidden Pivot Seminar was full, we will be offering the class again on December 3-4 for $1150. The fee includes entry to weekly tutorial sessions for an entire year. For more information, click here.
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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 Tuesday, 18 November 2008 | Digg This Article | Source: GoldSeek.com
