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Fan Yang

Goldman Sachs (GS) holding north of 160 after double bottom breakout

Shares of Goldman Sachs (GS) have been sliding in September, and this slide could be setting up for a buy-on-the-dip strategy. 

GS Daily Chart 9/28

(click to enlarge)

Double bottom completed:
- In a previous update, I noted that GS has completed a double bottom.
- I noted upside to the 180 mark. 
Support at 160:
- A pullback continued into this week. 
- I noted that 160 was going to be a short-term pivot to monitor for support, and it apparently is.
- Note also the cluster of 100-, and 50-day simple moving averages (SMAs).
- Finally, the RSI was testing 40, and I noted that if it stays above 40 it represents maintenance of the bullish momentum.
- The piercing pattern I noted refers to the combination of the last 2 daily candles.
- I think we are indeed pivoting back up from 160.
- If price action can hold above 160 this week, I would consider a bullish outlook in the upcoming weeks with 180 as a target in the medium-term - a possible target for Q4 2016.
If 160 fails:
- I think a steeper correction is possible, but if GS is in a bullish breakout, it might not retrace so deep.
- If 160 fails as support (let's say price comes up to 165 and falls back below 160), we should monitor the 153 area as a last line of defense.
- 153 is like the central pivot of the consolidation range which we call a double bottom now.If price breaks below 153, it will look like we just had a failed bullish breakout. A break below 150 would be an even clearer sign that the prevailing bearish trend is not broken.
- In this scenario (break below 150), the pressure will be on 137.50, with risk of breaking lower. 

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