Citigroup – Insiders buying in August 2009

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Citigroup Chairman of the Board, CEO of Citibank N.A & 3 Directors were the insiders who bought Citigroup shares last month. The Chairman & the CEO bought 1 million shares each at $3.21 and $3.41 respectively. It is a good sign when insiders purchase their own company’s shares because they know the company’s business much better than any investors. This is also a good indication for investors to take long position of this stock.

Stock’s Background

  • 3 years historical high = $55.08
  • Current Price = $4.68

Note: The stock price is unlikely to go back to $55.08 because the fundamental of the company has changed. Citigroup is still losing money this year.

I am waiting for a right time and right price to buy this counter for long term investment.
My plan:

  1. Wait and see whether the stock price can hold above $4.26 and the 20D and 50D MA support trend in Sept. If the stock price continues to stay up after big Dow Jones & S&P500’s correction, I will consider to buy at the price near $4.26 in Oct.
  2. If the price breaks the $4.26 support level,  my entry target is around $3.65. I need to make sure all the Technical Indicators do not show bearish convergence and the stock price is not on the down trend.
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