When Congress made headway on financial regulatory reform on Friday, Cramer said clarity on what the legislation entailed would allow the banks to rally. And they did. But given their poor performance Monday, he now realizes that it was just a 24 hour relief rally. Yet, by looking at the charts, one major bank should be doing much better in the near future — Citigroup.
Trading near $4 a share, Citi has been held back by "endless government selling," Cramer said, “as the Treasury has totally botched the sale of its huge stake in this company.” Morgan Stanley has already sold 1.5 billion shares, or 19.5% of the total Citi stake, for the government, and it has permission to sell another 1.5 billion more. And Oppenheimer predicted that the government could possibly unwind half its position by midsummer, putting an enormous amount of pressure on this stock as more and more supply floods the market.
Still, that may not be enough to keep Citigroup down, at least according to Cramer fave technician Tim Collins. Collins called Citi’s chart's a "beauty," Cramer said, and he thinks we could see “a major rally in this one based on the technicals,” possibly taking the share price up to $5.
What’s Collins seeing here that the rest of the market isn’t? Watch the video to find out.
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