Thursday, May 21, 2009

Beat Down Financials I might buy

ABK and C, both virtual financial pariahs, even with the recent rally, are two stocks I'm interested in at the moment. I've been interested in them since last year, but have never had enough cash free to make a move, which unfortunately equalled me missing out on a couple of 100% moves off of lows. From a purely technical standpoint, we hit the lower trend line around 1.25 for Ambac today. A close below 1.20 signals a reversal of the rally and is a sell signal. Bullish price action on Friday or Tuesday signals a move back upwards(which is still the bias) with a take profit point around this months' highs of 1.80ish.




Citigroup is still on the upward trajectory it has been on, and in fact held support today off of a bounce at the 3.60 short term bullish trend line. So I would still expect continued upward movement, targetting 4.25. Despite the slowing of the overall market rally, signs are not yet showing that it is over. For those on the long side, the hope is that the next two or three days show some hope, otherwise the rally might start to correct as confidence lags.

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