Main trading ideas on financial markets for 15.07.2019

Citigroup

The season of financial statements from the US companies is open. The signs of economic slowdown, the continuing trade war and lower interest rates can cause significant damage to the banking sector.

Despite strong financial results demonstrated by the banks, investors are pessimistic about this sector.

Traders foresee the imminent end of the bullish cycle and the beginning of a recession. A decrease in lending volumes and an increase in the number of defaults will have a definite effect on quotes.

We’ll find out if these predictions were correct pretty soon. American banks will begin to file their reports in the coming days.

Citigroup shares are testing the April highs at the $ 70.74 resistance level. A decrease in volumes compared with spring results suggests that the bulls have run out of strength to keep moving forward.

The bank will publish its report today. If the results are below the expectations, we should sell with a target at $66 level, where the 50-week and 200-day moving averages are located.

Citi price chart

Brent

The oil prices of major oil brands have moderately decreased on Monday after a surge amid concerns over the tropical storm Barry in the Gulf of Mexico last week.

Bloomberg reports that due to bad weather, about 73% of oil production in the Gulf of Mexico was suspended as of Sunday. However, a number of companies, including ExxonMobil (NYSE: XOM) and Chevron (NYSE: CVX), are already preparing to return their employees to platforms in the bay and resume production.

According to the country’s ministry of energy, about 16% of all oil and 3% of natural gas in the United States are produced in the Gulf of Mexico.

Meanwhile, the report of the International Energy Agency (IEA), published last week, remains a negative factor for the oil market. The report’s authors note that, despite the decline in oil production in OPEC + countries in the first half of 2019, oil supply exceeded demand by 900 thousand barrels per day. In the second quarter, it is expected to exceed about 500 thousand barrels per day, whereas previously a deficit of 500 thousand barrels per day was expected.

Brent quotes have already formed 2 bearish doji in a row under a 200-day moving average. During the day, we expect a decline to 38.2% Fibo level. If the price breaks it, we should start selling to $ 63 support (50% Fibo).

Brent price chart