Citigroup’s stock set to produce ‘bullish engulfing’ pattern at a time of ‘bullish technical divergence’

Citigroup Inc.’s stock
C,
+1.70%
rose 2.0% in afternoon trading, reversing an intraday loss of as much as 0.4%, putting it on track to produce a “bullish engulfing” candlestick chart pattern that many technicians believe precedes a trend reversal. On Thursday, the stock had opened at $50.56 then closed at a 17-month low of $50.03. On Friday, the stock opened at $49.84 then rallied to trade recently at $51.05, to completely engulf the previous session’s open-close range. When this pattern appears at the low of a significant downtrend, many believes it suggests bulls have taken control. This comes at a time of bullish technical divergence, as lows in the Relative Strength Index, a momentum indicator, over the past month have risen from 24.30 on March 8 to 24.92 on Thursday even as the stock’s price lows have decreased from $54.87 on March 8 to $50.03 on Thursday, another sign that momentum may be swinging to the bulls. The stock has dropped 15.5% year to date, while the S&P 500
SPX,
-0.27%
has slipped 5.6%. Citigroup is slated to report first-quarter earnings before the April 14 open.