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Citigroup Inc’s (C-N) shares are approaching a potential bullish technical signal which indicates that this year’s 14% rally could continue, even as some analysts remain critical of the bank’s fundamentals.

The technical signal, called a “golden cross,” forms if the stock’s 50-day moving average goes above its 200-day moving average. On Jan. 23, Citi shares touched their highest since August.

“Citi has been a longtime underperformer but we are finally starting to see some signs of technical improvement,” said Ryan Detrick, chief market strategist at Carson Group.

“By no means is it out of the woods, but this is a nice change given how poorly things have gone for a very long time,” he added.

Since its January peak and including Wednesday’s moves, Citi has traded sideways and was last down 1.42% at $51.5 on Wednesday.

Traders have dialed back their pessimism following a surge of activity in defensive puts on Citigroup options in the last two months of 2022.

The one-month moving average of puts-to-calls traded has dropped to 1.07-to-1, down from 2.6 puts traded for every call late last year, according to Trade Alert data, signaling less bearishness.

Analysts say Citi’s price-surge bets rest on its “cheap” valuation attracting bargain-hunters. The bank is trading at a discount to its Wall Street peers.

“Trading at about half of book value and almost a 4% yield is attractive in this environment,” said Thomas Hayes, chairman and managing member at New York-based equity manager Great Hill Capital LLC.

Still, the bank’s fundamentals have not caught up with the optimism around share prices yet.

Citi’s return on assets emerged as one of the lowest among rivals in fiscal 2022. It had also forecast expenses would surge to the highest in nearly a decade this year.

“On a fundamental basis, there aren’t a ton of signs of Citi hitting its goals just yet,” said Eric Compton, equity strategist at Morningstar.

“The bank is still very much in the build-up of expenses and early stages of reinvesting in their franchises.”

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