Citigroup Inc (C) Bulls Bet On a Round-Number Breakout

Citigroup Inc hasn't traded north of $60 since January 2009

by Karee Venema

Published on Dec 12, 2014 at 10:16 AM
Updated on Apr 20, 2015 at 5:32 PM

Call players targeted Citigroup Inc (NYSE:C) on Thursday, with the contracts trading at 1.2 times the average daily pace. Roughly two-fifths of the volume occurred at one strike -- C's June 60 call, where 20,847 contracts changed hands, a number of which were bought to open. By initiating these long calls, speculators expect C to rally through the round-number $60 mark -- and to levels not seen since January 2009 -- by June options expiration.

Widening the sentiment scope reveals yesterday's accelerated call activity is just more of the same. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), for example, C's 10-day call/put volume ratio of 3.16 ranks in the bullishly skewed 80th annual percentile.

On the charts, C has been stair-stepping its way higher since bottoming out at an annual low of $45.18 in mid-April, with the shares up nearly 20%. This week, however, C has shed 3.5% after offering up a lackluster fourth-quarter forecast due to lofty legal fees. This downtrend is continuing today, with Citigroup Inc (NYSE:C) off 0.7% at $54.13, despite a price-target hike to $65 from $62 -- and a reiterated "buy" rating -- at Nomura.

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