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Bank Of America And Citigroup Struggle After Stellar Q1 Earnings

Bank Of America And Citigroup Struggle After Stellar Q1 Earnings

Bank Of America Corporation (NYSE: BAC) and Citigroup Inc (NYSE: C) reported first-quarter 2021 earnings results Thursday morning and, like Goldman Sachs Group Inc (NYSE: GS), JPMorgan Chase & Co. (NYSE: JPM) and Wells Fargo (NYSE: WFC), beat expectations.

The banking sector had been in a strong uptrend since November 2020 and has recently started to consolidate.

Bank of America reported EPS of 86 cents versus the Street’s expectation of 66 cents and reported revenue of $22.9 billion, exceeding the consensus of $22.1 billion.

Citigroup reported revenue of $19.3 billion beating the Street’s estimate of $18.8 billion and EPS of $3.62 against an estimate of $2.57.

Related Link: Goldman Sachs, JPMorgan, Wells Fargo Kick Off Bullish Start To Bank Earnings: What Technical Traders Need To Know

The Bank of America Chart: Bank Of America has been trading in a bearish rising wedge since Jan. 12 and on Thursday was trying to hold within it, bouncing between support at $37.79 and resistance around the $40 mark. At midday, Bank Of America’s stock was pinned between the eight-day exponential moving average (EMA) and the 21-day EMA. Because the eight-day EMA is still trending above the 21-day EMA, the stock could be viewed as bullish.

Bulls want to see the rising wedge negated and for Bank Of America’s stock to jump up over both the upper trendline of the wedge and the resistance level at $40.06. The stock could then make a move towards $43.34.

Bears want to see Bank Of America’s stock close below the rising wedge which would confirm the pattern. If the stock can’t hold support at $37.79, it could drop down to $35.72 before finding another level of support.


The Citigroup Chart: Citigroup’s stock gapped up 2% Thursday, opening at $74.45. The stock immediately sold off, which then closed the gap.

At midday, Citigroup was printing a red bearish engulfing candle stick and had lost support at $72.93. This type of candlestick is considered bearish because dips in the stock aren't being immediately bought. This could indicate lower prices will come over the next few trading sessions. 

Citigroup’s stock is trading on the eight-day and 21-day EMAs, which is and bulls will want to make sure the stock doesn't drop below them. If Citigroup can close above $72.93, it has room to trade at its 52-week high of $76.13. If the stock can surpass that level and make a new 52-week high, it could trade up at its next resistance near the $81 mark.

Bears want to see Citigroup’s stock close below $72.93, which could see it drop down to the next support level at $68.10. If the stock struggled to hold that level, there is no support until $65.30.


BAC and C Price Action: At publication time, Bank of American was trading down 3.3% at $38.55. Shares of Citigroup were trading down 0.7% at $72.37.

Photo by Tony Webster via Wikimedia


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