- Health care stocks tanked after reform was passed. The knee jerk reaction will be to sell financial stocks once reform passes.
- Citigroup is the most important financial as it captures the imagination of investors. The government will be selling shares for the next few months and that should put a lid on Citigroup.
- The stocks have run so far that even if they fall back to support that could be a huge hit.
Goldman Okay But Rest Of Financials Not
While I think Goldman Sachs is very likely to make a short term low on these Senate hearings, I think the financials are a horrible bet right now. My reasons are as follows:
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I bought some C last week. It is meant for a long term hold. 4+ years. It was a very small position. I knew the stock would probably trade lower over the next year. I am planning on averaging lower. I won't add to it until. maybe 4.25 and again if it breaks 3.90.
Why not just wait until the government is almost done selling? Why step in front of the largest sell order of all time?
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