Cramer on C

Discussion in 'Stock picks and trading strategies' started by yoyomama, Mar 7, 2010.

  1. yoyomama

    yoyomama Member penny contest winner

    This I think is from Friday's show:

    So love him or hate him, I get all that but what's he saying...wait until the Gov sells their shares to get in?
     
  2. timmhaan

    timmhaan Member

    i've been dollar value averaging into this stock for months now. it's starting to break out of it's range, so IMO it looks good to go now.
     
  3. RedStripe

    RedStripe Active Member won weekly contest 4x won july/10 simulator won oct/09 simulator

    Its cheap under 3.50 IMO...

    You want to buy at 3.15 though...

    This one could double but give it time.
     
  4. yoyomama

    yoyomama Member penny contest winner


    Thanks. I'd like to buy at .97 also but was Cramer's advice to wait until the Gov sold is what I was wondering.
     
  5. JimmyYayo

    JimmyYayo Member

    We'll know the government sold everything until they finished selling all their shares or at least half.

    IMO Buy below 3.40, could breakout when you least expect though.
     
  6. RedStripe

    RedStripe Active Member won weekly contest 4x won july/10 simulator won oct/09 simulator

    Cramer has been recommending getting in BEFORE the government sells it shares to catch the pop.
     
  7. wireandy

    wireandy Member

    I was wondering why Cramer was suggesting to buy this before... I ended up make a quick buy and sell, but I'm waiting for the govt to sell before holding long on this one.
     
  8. yoyomama

    yoyomama Member penny contest winner

    You'd think when the Gov sells...there would be some serious dilution...as in the price going down, then get in but....
     
  9. doublereed

    doublereed Active Member won weekly contest 4x penny contest winner won feb/10 simulator won apr/10 simulator

    The theory here is that everyone knows that the gov't wants to sell. It's the same as every day except that we all know that the biggest holder of the company wants to sell. There fore the price is holding lower for the time being because nobody wants to take a hit on their shares once the gov't starts selling.

    In a normal situation... there are large institutions that are the largest share holders. They may or may not want to sell at ANY given time. We don't know that though.

    It's kind of a mind game at this point. Are the large institutions going to step up and buy the gov't shares as liquidity?? or are they going to let the share price drop and hope they can get in the door when the value players step in and create a floor?

    If there are no buyers the Specialist has to step in an buy the shares to maintain an orderly market. However I don't think the specialist is going to want to buy the shares at the closing price of the last day, so there will probably be some kind of gap down to a support level.... like $2.75-2.80 and he'll start buying the shares right there, because he knows that every institutional buyer is looking at that level as support too and they'll buy with him and drive the price up from there.

    So... Long story short... I think that we should wait for the gov't to start selling. Just keep in mind that just because they said they'd start selling AFTER March 19th (was that the date?), it doesn't mean they can't/won't hold their shares till April or May and sneak out after the initial panic is over.

    I'm going to be looking at that 2.75 level as strong support for a possible longer term investment, but won't hesitate to trade other levels that provide a safe trade.
     
  10. JimmyYayo

    JimmyYayo Member

    Very long explanation :)
     
  11. wireandy

    wireandy Member

    This explanation makes great sense, thanks for taking the time to share your knowledge. All things considered, I'm in no rush to gobble up shares of C until the govt does decide to sell. I think most of us agree that there will be a drop in price once this sell off begins. With this in mind, I don't see the point of buying now when we can reasonably expect a drop in value in the near future. I have played this one a few times recently for small gains, but I'm not going to hold for any considerable period of time until the govt selling begins.

    I believe Cramer is telling people to buy because he is speaking to the average investor. It is better to buy C now than never. Even if you can get it lower, many folks don't quite know the right time to buy. If anything, at least he is imprinting this stock in the back of many investors minds. Than again, maybe he is cahoots with the govt and trying to get people to buy up the govt's shares for a profit!!!
     
  12. BentleyVTech

    BentleyVTech Member

    Citi is looking good today! I've bought on the way up from 2.60 to 5, and sold some when it made the run above 5. I'm still a holder of the stock, and will continue to be.

    What if Citi goes up to 3.75-4.00 range, and the government announces to sell its shares of Citi to large investors for a small discount...lets say .25 cents less than the asking price that day. Or if they start selling in increments...you won't see that large drop you are expecting.

    Doesn't the government already own the shares of Citi though? So how could it become even more diluted? Back in Feb. 2009, I thought thats why you saw the huge price drop, because the preferred shares were converted to common stock, which caused the dilution in the common share price.
     
  13. wireandy

    wireandy Member

    The government is a current holder, but won't be a future buyer. As such, when they sell, the demand will remain the same, while the supply will be greatly increased.
     
  14. timmhaan

    timmhaan Member

    I don't think there will be a massive drop in price. too many eyes are watching this. you can bet this deal will be structured in a way that will minimize damage to the price. meanwhile, we're up 6% this afternoon and right at the 200 dma. there "should" be some resistance here, but i wouldn't be suprised if we pop above it and hug it for a few days\weeks, then move higher.

    i'm a buyer on any dips.
     
  15. BentleyVTech

    BentleyVTech Member

    I'm with Tim, this deal will be structured so the stock price will be minimally affected.

    Once the gov't is off-board the ship, that will bring in much more interest. One of the big complaints investors had of Citigroup was that it was gov't controlled. Once that monkey is off its back, it'll spark that much more interest.
     
  16. RedStripe

    RedStripe Active Member won weekly contest 4x won july/10 simulator won oct/09 simulator


    :)

    Time to take some off at 3.85
     
  17. yoyomama

    yoyomama Member penny contest winner

    Just sayin'.
     
  18. RedStripe

    RedStripe Active Member won weekly contest 4x won july/10 simulator won oct/09 simulator

    You do want to buy at 3.15 if it gets back there.

    But i also said I like it under 3.50 :)
     
  19. BentleyVTech

    BentleyVTech Member

    Redstripe,

    Do you ever look at options? Take a look at the C options and let me know your analysis for Citi in the coming months.

    It looks like TONS of volume for calls vs. puts, signaling some more upside in the upcoming months. You've got a bunch of big time investors in C...Soros & Paulson.

    This recent increase might be met with resistance at 4, but with no big news out and HUGE volume today on the increase, which normally confirms the trend - I think theres still steam left in this tank to get above 4...and who knows after that. Back in August 09, it blew right through 4 on its way to 5 plus.
     
  20. doublereed

    doublereed Active Member won weekly contest 4x penny contest winner won feb/10 simulator won apr/10 simulator


    Don't forget that Options are 1:1 too... for every call that has been sold there has to be someone there to sell it to them. If there weren't anyone selling the calls there wouldn't be the large volume in the calls.

    My bet is that those calls expire worthless.
     
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