TheStockTalk.net

There has been a lot of coverage on Citigroup’s (C) stock the last two days. The emphasis of the coverage has been on if Citi could stay above $5/share. This was odd to me because I had never seen this with any other stock so I did some thinking and research and found out why this is such a big deal!

My personal trading system automatically eliminates stocks below $10. I had picked up this rule after reading a good bit of information from the CAN SLIM system and thought nothing about it. I didn’t realize that all the big funds had a similar rule–and guess what, their cutoff level is $5 (even though in investing club at Auburn, we had the same rule).

So basically, this is a big deal because if Citi falls below $5, the stock cannot get bought up by the big funds and see the kind of momentum swing often associated with stocks put on the buy list by the funds. Hopefully you didn’t get into Citi back when it was around $20 and plan on holding it for life like a couple people I know did..