Markets – Macro – Technicals

$GS: Goldman Sachs

The other day I mentioned financials needing a rally. Obviously Goldman Sachs is a big part of the group and the chart looks like dearth frankly.

Year to date the stock is down 5.5% as we speak and is in the midst of a topping pattern while breaking a bear flag to the downside last week.

To invalidate the pattern $GS really needs to close above $235/236. Failure to do so and a break of the $220 area activates the larger topping pattern and targets the $212-$217 range with downside risk into $192-$194.

The upside: The RSI closed last week below 30, not a spot to want to press short, and today the complex is bouncing during the beginning of OPEX week, typically bullish in April.

Updated 4/18:

Following its poor earnings report today $GS got clocked! As a result the stock dropped to target the first risk zone I mentioned yesterday $212-$217 and the filling of the open gap:

With the RSI now at 25 and new lows in place the RSI shows a positive divergence on the daily chart and a large open gap above. As long as $GS can stay above today’s lows it has a shot at filling the upper gap. Without an eventual sustained break above $226 the stock risks eventually filling the lower open gaps below.

Updated 4/20:

$GS has moved higher on the positive divergence and is now up almost $3.5 above the level posted on Tuesday. The RSI is now at 33. The stock is now on route to try to fill the earnings gap, but the daily 5 EMA will pose resistance as will the previous lows at $220.85. Failure to recapture these price zones opens the possibility of retesting lows or making new lows:

All content is provided as information only and should not be taken as investment or trading advice. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise. For further details please refer to the disclaimer.


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