Gediminas Jasionis

Can We Trade Citizens Republic Bancorp, Inc. (NASDAQ: CRBC) Before It Falls?

by Gediminas Jasionis September 29, 2009
citizen_logo.jpgCurrently holding in accumulation phase, the stock of Citizens Republic Bancorp, Inc. (NASDAQ: CRBC) provides an opportunity to trade in the established price range. An approach applied by swing traders can provide easy gains, as the share price is now "locked" between $0.7 and $0.9 per share.

Currently dropping, the price should bounce back up after reaching the support line. The recently witnessed moves on unusually high volume didn't make the price move out of the established range as if confirming the accumulation phase.

Sometime these things fail as well, but if everything goes by the book, we should see the price eventually breaking above the $0.9 level and advancing with this level further set as support. But of course that would require fundamentals that would be able to support the move, and that, is the company's weak point. A lack of funds makes inevitable a stock price drop, which is really bad for the company at this point.

Citizen has recently announced they're covering the outstanding notes and other securities with common stock, which, through dilution, will cut the share price down. Since Citizens Republic is troubled to the level of being threatened with delisting from Nasdaq, it must keep its price above the $1 mark, which was yet to be achieved. Now with additional stock issuance at hand this goal will probably get even further. So even when trading the earlier mentioned range, keep the news in mind and don't forget to set your stop loss orders just below $0.7.

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