Technical Analysis – Goldman Sachs stock bulls back above 50-day SMA; narrow range in near term


Melina Deltas, XM Investment Research Desk

Goldman Sachs stock has been trading sideways since the bounce off the two-and-a-half-month low of 151.50 over the last couple of months. Also, this consolidation area of 189 – 203 holds above the 50-simple moving average (SMA) in the daily chart.

According to the MACD, the market could maintain neutral momentum in the short-term as the indicator is flattening above its neutral zero line, though the RSI suggests that the market is dropping towards the negative area and therefore some weakness is possible.

On the upside, the price could attempt to overcome the 38.2% Fibonacci retracement level of the downleg from 275 to 151.50, near 198.60 and touch the 203 hurdle. Should traders continue to buy the stock would penetrate the consolidation area and hit the 210 handle.

A reversal to the downside, however, could find immediate support at the 189 level, which currently stands near the 50-SMA. More negative pressure could drive the market towards the 23.6% Fibonacci of 180.77.

Overall, in the bigger picture, the stock has been trading within a downward movement over the last year. In case of a successful close above the 50.0% Fibonacci and the 200-SMA, this would turn the bias to bullish in the very short term.