Goldman Sachs Group Inc. (GS) was reviewed last week, but GS was included in Jim Cramer's GLUM ETF and GLOOM Index. Last week I said that, "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." GS had limited upside price movement and is back down near the key $225 level. Let's review the charts and indicators again.
In this daily bar chart of GS, below, we can see that prices are pointed down and our favorite indicators are mixed. GS is below the declining 50-day moving average line and below the still positive 200-day line. The daily On-Balance-Volume (OBV) line has made a new low for the move down and this may be foreshadowing GS making a new price low. On the plus side we have a small bullish divergence as momentum has made a higher low from early May to late May. This is not a big divergence by any means and prices may just ignore it.
In this weekly bar chart of GS, below, we have bearish indicators. Prices are below the cresting 40-week moving average line. The weekly OBV line is bearish and has been declining all calendar year. A weak OBV line tells us that sellers of GS have been more aggressive. The weekly Moving Average Convergence Divergence (MACD) oscillator is in a bearish mode below the zero line.
In this Point and Figure chart of GS, below, we have a potential downside price target of $191.45. A rally to $245.76 is needed to turn prices to the upside.
Bottom line: I see more bearish signals on GS that positive ones so unless we are surprised by an upside reversal, GS is more likely to trend still lower this summer. A gloomy summer for GS longs.