After the massive rally on Thursday, investors were in full “buy the dip” mode. Even if a company did not serve up the best third-quarter report, if the stock was in the red, all the better.
The aforementioned scenario applies to Citigroup Inc (NYSE:C), which is the PreMarket Prep Stock of the Day.
Major Rally Off Double Bottom: Citigroup made a new low for the move on Wednesday at $40.05 and rebounded to close at $40.84. On Thursday's wash out open across the board, Citigroup bottomed only four pennies from that low and roared back to close at $42.95.
Citigroup's Q3 Report: Before the open Friday, the company announced third-quarter adjusted EPS of $1.50 vs. a $1.42 estimate along with sales of $18.51 billion against an $18.25-billion estimate.
The bank also said: "to be clear, our intention is to wind down our presence" in Russia.
CFO Mark Mason said deals in the pipeline remain quite strong versus pre-pandemic levels.
For some reason, the good report was not good enough, and the issue was in the red during premarket trading.
PreMarket Prep's Take: When the issue was being covered on the show Friday, it was trading in the red by 50 cents at the $42.50 area.
“I think you will find buyers today after Thursday’s price action,” said co-host Dennis Dick.
“Money managers that did not deploy capital yesterday will be looking to do that today,” he said. “I would love to buy at yesterday’s low, but I do not think it will get that low.”
The author of this article was looking to “buy the dip” in the issue and targeted the $42 area as a possible entry point with a stop at the recent lows.
C Price Action: Investors stepped in well ahead of the co-host's possible points of entry. After a slightly higher open, it had a brief dip but found support just under the close ($42.95) at $42.80 and embarked on a significant rally.
In fact, the issue reached its highest level since Oct. 4 when it peaked at $44.75, only reaching $44.42. The stock has since fallen and is trading actively in the $43 handle.
The discussion on the issue from Friday’s show can be found here:
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