July will deliver an up month for Goldman Sachs (GS) for the first time since March and only the third time since it peaked nine months ago. GS is up 12% for the month of July, handily beating the 7% gain for the S&P 500 and and the 6% gain for XLF, the SPDRs Select Sector Financial ETF. It has been a long time since GS experienced relative out-performance to the upside. The stock has been trapped in a strong downtrend. The chart below demonstrates that GS’s “fever” remains unbroken.
*Chart created using TeleChart:
The last time I mentioned GS, it had bounced off its July 2009 lows and looked ready to rally to my $150 target. It took almost two months to hit that target. The route on the way there included two breaks of the July, 2009 support.
The stock has been in limbo since gapping up and then fading after GS reached a $550M settlement with the SEC over fraud charges. The stock is now looking for the catalyst that earnings could not provide. Until then, I will just keep watching how the stock reacts at key technical levels. While strong resistance looms overhead, the stock will record a minor victory by holding support at the now increasing 50-day moving average.
Be careful out there!
Full disclosure: long GS, long XLF puts