The Goldman Sachs Group Inc. (GS) was reviewed earlier this month. At that time I wrote, "The short-term picture of GS has improved in recent weeks, but the weekly chart and the Point and Figure chart tell me to remain cautious for now." GS declined after our last review but has firmed in recent days. Let's review the latest charts to see if the charts and indicators show a good entry point now for buyers of Goldman Sachs, which is a holding in Jim Cramer's Action Alerts PLUS charitable trust.
In this daily bar chart of GS, below, we can see that prices have been making a basing pattern the past four months. A rally and close above $240 will complete the pattern, but we might not wait that long. Prices are above the flat 50-day moving average line. The slower-to-react 200-day line is still pointed down. The daily On-Balance-Volume (OBV) line dipped this month as price retreated but it is turning up again. The daily Moving Average Convergence Divergence (MACD) oscillator narrowed and is now poised for an upside crossover and fresh outright go-long signal.
In this updated weekly bar chart of GS, below, we can see that prices are just a few dollars below the declining 40-week moving average line. The weekly OBV line shows a dip and recovery. The OBV line is poised to make a new high for its recent move up. The weekly MACD oscillator is crossing to the upside from below the zero line for a cover-shorts buy signal.
In this updated Point and Figure chart of GS, below, we can see a new bullish upside price target of $276.24. A trade at $240.92 will be a double top breakout.
Bottom line strategy: Aggressive traders could go long GS at current levels and add to longs above $241. Risk a close below $225 looking for gains to the $275 area or the March high.