Citigroup Inc (NYSE:C)

Market sentiment: Bullish

Citigroup shares are rising after the company posted better-than expected earnings. Citigroup, the biggest US bank by assets, said it lost $2.5bn in second quarter which was a smaller loss than the $3.67bn that analysts were expecting.

If this stock won’t go down much further, then it is a good idea to play bullish hedge trade.

As per my technical analysis, even though Citigroup is bearish, but in mid-term this is bullish.

The reasons are as follows

• Price pierced lower Bollinger band and bounced off from bottom
• RSI is 70 and CCI is 165 which show trend strength is strong and positive.
• Positive divergence has formed at bottom of CCI graph
• In six months time period, price has broken the down pitchfork and trading above it. That shows there is less down pressure on this stock.

Considering the above fundamental and technical reasons, we could go for September bull-put credit spread below $15. This trade will make 8.4% return as long as Citigroup stays above $15 at September expiration.