Thinking about buying Goldman Sachs (GS) on this pullback? Have you ever seen a bearish engulfing pattern? (October 17, 2017)
GS DJUSBK XLF WA V DJUSBK JPM GS
I want to look at Goldman Sachs ( NYSE:GS ) here. The company reported earnings this morning; the stock gapped up and then it traded down.
If we look at the Banking Index ( INDEXDJX:DJUSBK ), it looked like it had potential to break out. XLF ( NYSEARCA:XLF ), showing the same thing. XLF ( NYSEARCA:XLF ) has stuff like Visa ( NYSE:V ), MasterCard ( NYSE:MA ), just all kinds of stuff in there. But, the Banking Index ( INDEXDJX:DJUSBK ) is banks, right? This was looking like it was poised to break out, especially after JPMorgan ( NYSE:JPM ) reported earnings and they weren’t that solid. The stock traded down just bit but is now basically up at a new high. Yesterday it closed at a brand-new high, today it hit even a higher high. Then we look at Goldman Sachs ( NYSE:GS ). They report earnings, the same type of deal. Their trading profits weren’t as great; these companies make money on volatility and there is none.
What is interesting to me is, that this stock formed a bearish engulfing pattern. If we look at where the high was today and we look at where the low was today; if we look at that range, we drag this over, it has engulfed the last five trading days, whether it was up or down. The stock opened above them and closed below them. So anybody who bought over the last five trading days is now losing money, they are not happy about that. Not only that but frankly, over the last several weeks.
What I am saying is, you have got a big reversal here. I wouldn’t want to go near Goldman Sachs ( NYSE:GS ), no way. Because, even if the stock does find support here right around 230.00 and it kind of should if it trades according to this pattern. Even if it finds support here I don’t think there is any catalyst to see this thing to just absolutely start screaming higher. This is a stock that is going to take a while to rebuild. The whole financial sector seems like it is still consolidating, maybe waiting for a tax cut, I don’t know. Maybe waiting for Jumpin’ Janet to do something other than jump around at Jackson Hole. I don’t know.
This is a stock that is need of consolidation. This is one of those that, “Well, I wanted it to break out, it would have been great if it was above 250.00.” Well, that didn’t happen dude. So, if it doesn’t happen you don’t get to pretend like it did. This is telling you something. You get a lot of information from possibilities that go unfulfilled. This would be one of them. You want to stay away from Goldman Sachs ( NYSE:GS )
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