Goldman Sachs shares have risen from the 151$ price level towards our target that we were talking about since May the 20th. I’ve been long this share as I announced through STOCKTWITS from near its lows around $155-156 targeting the 165-167$ area.
Goldman Sachs shares have found support at the upper level of the Ichimoku cloud in the weekly chart as shown below. This was my initial Buy signal that once I saw price was being supported and was not breaking below 151.13$. After making a first upward bounce from that low towards 161$ I decided that I should buy the pull back using 151$ as stop for my long position. The decline from its highs near 180$ is until now a corrective move of three waves. This implies that this downward move is corrective and we should expect prices to reverse upwards to new highs. Confirmation of this bullish scenario would come only if the intermediate high at 174.99$ was broken. Moreover a good bullish sign would be if price managed to break above the downward sloping trend line that is now at 167$ where my target was and where prices have paused their rise.
Below is my chart that I’ve been posting through TWITTER and STOCKTWITS for some time now, pointing out that price is heading towards the blue trend line and in order for us to be more bullish for the longer-term, GS should break above this line. Time has come and GS is testing this resistance trend line and has also broken above the Ichimoku cloud on a daily basis.
The first reaction could be a rejection and a pull back towards the Ichimoku cloud at the 162$ price level. The price formation from the 151$ lows is looking and therefore I give high chances of breaking the resistance at 167-170$ and continuing higher. Important support at 162$ if lost we should expect price to test 157$ next. I prefer now to take my profits and reduce long exposure in this share. Follow me at @alexanderyf or find my at STOCKTWITS for more equity analysis. Trading2day members of the US Daily strategy receive daily a newsletter with all my equity picks and analysis of the major indices.
As always, thank you for taking the time to catch up on my thinking.