{"id":1806,"date":"2010-05-24T02:11:44","date_gmt":"2010-05-24T06:11:44","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=1806"},"modified":"2010-05-24T02:38:23","modified_gmt":"2010-05-24T06:38:23","slug":"goldman-sachs-bounces-off-july-lows","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2010\/05\/24\/goldman-sachs-bounces-off-july-lows\/","title":{"rendered":"Goldman Sachs Bounces Off Its July Lows"},"content":{"rendered":"

On Friday, CNBC’s Fast Money asked the question “Has Goldman Bottomed Out?<\/a>” The answer to these kinds of questions is always a “maybe” or a more resolute “perhaps\/perhaps not” but I was a bit amused at the reasoning provided for guessing that Goldman Sachs (GS) has reached a bottom:<\/p>\n

    \n
  1. It acted well on Wednesday by going up while the S&P 500 went down aggressively (nevermind all the other days in May when Goldman was a very poor relative performer. In fact, nevermind that GS has underperformed the S&P 500 since its 52-week high back in October.)<\/li>\n
  2. The Senate passed financial regulation, but some of the more “draconian” measures will not make it into the final bill (betting on government action is always precarious)<\/li>\n
  3. GS is the smartest company in the world (no comment from me – this one is a layup)<\/li>\n
  4. GS has reached book value (OK – this actually sounds like a very good reason!)<\/li>\n<\/ol>\n

    In the end everyone missed the simplest reason, GS has finally traded down to its July, 2009 lows, a major level of support. This level is also very significant because the S&P 500 bounced from its July lows to go on an extended run for the rest of the summer (I reviewed the July action in a recent post<\/a>). I like the simplest answers (guesses): so often, technicals trump much of the tidy and intricate logic that we sometimes try to use to excuse our trading and investing actions. Sometimes a stock just is as a stock does.<\/p>\n

    Steve Cortes was the main proponent of buying GS here, and his upside target is $150. I think that is too conservative: that target only takes GS to the bottom of its last big gap down and barely takes GS much more above book value. I think a traders targets GS to fill that gap and the timing may just happen to coincide with a test of a rapidly declining 50-day moving average (DMA).<\/p>\n

    Here is the latest read on Goldman’s charts followed by the video segment from Fast Money:<\/p>\n


    \n
    \"Goldman<\/a>
    Goldman bounces of the July, 2009 lows<\/figcaption><\/figure>
    \n
    \n    \"A<\/a>
    \n
    \nA GS rally faces multiple points of overhead resistance but “should” fill the last gap down.<\/strong>
    \n
    \n*All charts created using TeleChart:<\/strong>     <\/a><\/p>\n

    <\/p>\n

    <\/object>
    \n<\/center><\/p>\n

    Be careful out there!<\/p>\n

    Full disclosure: long GS<\/p>\n

    Don’t break 130, target 150<\/p>\n","protected":false},"excerpt":{"rendered":"

    On Friday, CNBC’s Fast Money asked the question “Has Goldman Bottomed Out?” The answer to these kinds of questions is always a “maybe” or a more resolute “perhaps\/perhaps not” but I was a bit amused at the reasoning provided for guessing that Goldman Sachs (GS) has reached a bottom: It acted well on Wednesday by … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[135,62],"tags":[207,208,1597],"class_list":["post-1806","post","type-post","status-publish","format-standard","hentry","category-stock-market-trading","category-technical-analysis","tag-goldman-sachs","tag-gs","tag-technical-analysis"],"yoast_head":"\nGoldman Sachs Bounces Off Its July Lows - ONE-TWENTY TWO: Trading Financial Markets<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/drduru.com\/onetwentytwo\/2010\/05\/24\/goldman-sachs-bounces-off-july-lows\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Goldman Sachs Bounces Off Its July Lows - ONE-TWENTY TWO: Trading Financial Markets\" \/>\n<meta property=\"og:description\" content=\"On Friday, CNBC’s Fast Money asked the question “Has Goldman Bottomed Out?” The answer to these kinds of questions is always a “maybe” or a more resolute “perhaps\/perhaps not” but I was a bit amused at the reasoning provided for guessing that Goldman Sachs (GS) has reached a bottom: It acted well on Wednesday by ... 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