Goldman Sachs Group (GS) was reviewed in early March, where I said, "I am cautious on the next sustained move for GS. The trend is up but the indicators are mixed. A move above $275 looks bullish and a decline below $240 looks bearish." GS failed to move above $275 and finally broke below $240 in late April. Then stock eventually fell to $225 before an upswing.
The big question now is whether we have seen the end of the decline or should we remain cautious? Let's check out the latest charts and indicators.
In the daily bar chart of Action Alerts PLUS holding GS, below, we can see mixed signals. Prices are below the declining 50-day moving average line but another strong up day could put GS above the line. The 200-day moving average is also above the market and it is flattening.
The daily On-Balance-Volume (OBV) line is showing improvement this month and that buyers are acting more aggressively. In the lower panel is the 12-day price momentum indicator, which shows higher lows from May to June. Prices made lower lows over the same time frame so this is a bullish divergence. The pace of the decline slowed suggesting that buyers became more aggressive on the way down.
In this weekly bar chart of GS, below, we can see that prices have chart support from $230 to $210. GS is below the cresting 40-week moving average line. The weekly OBV line is still pointed down; however, the MACD oscillator has begun to narrow and could soon cross to a cover shorts buy signal.
In this Point and Figure chart of GS, below, we can see that a rally to $243.33 or $245.76 will really improve the chart. The volume at price bar (left scale) suggests good buying support below the market.
Bottom line: It looks like the downside on GS is exhausted and prices can try the upside again. I am not sure what sort of upside potential GS has right now but I can define the risk. A close below $225 would be a new low close for the move down and the bears would be in control.