Here’s your trade on Goldman Sachs ($GS) and a lot of other stocks you are probably watching – April 30, 2024
Dan Fitzpatrick here at StockMarketMentor.com. I want to go over Goldman Sachs ( NYSE: GS ).
Cramer is going to be doing this stock on his show on Wednesday. I just finished the write-up so I thought I’d give you the heads up. First of all, this isn’t something you want to be buying right now, I’m just letting you know. Also, another thing, just because you’re getting a heads up on what Jim does, doesn’t mean that you have an edge and you’re going to be able to make money on Jim’s call.
That stuff ended a long time ago. It has nothing to do with Jim, it’s just that way back when everybody was sitting around waiting and then everybody would buy all at once. So you could buy it and then sell it to the knuckleheads who were just snapping at a shiny object. You can’t do that anymore. There is too much volume, algorithms, and every other thing. So it just isn’t the same dynamic as it used to be, I’m letting you know that upfront.
So we’re going to look at the weekly chart. This thing has been in a base for like, two and a half years, this is a long base. Now, the range from top to bottom has been $140.00, so it’s not like it’s been in one big tight volatility squeeze because it hasn’t been. However, this is absolutely a base. It’s a high base after this kind of move.
And you can see that with this type of dynamic, just a couple of weeks ago we got some pretty heavy buying here. But not enough to push the stock up, that happened the following day. But it was enough to contain this pullback to just two weeks. And by the way, this is the following week, not the following day, so this is a good bullish indication.
Also, if we look at where this stock is now, it traded today at an all-time high. Yesterday it closed at an all-time high. So you can’t look at this stock and say, well, it’s not going up. The weird thing about stocks that make all-time highs, it’s not just a one-day wonder, they tend to keep making them. So I’m looking at Goldman ( NYSE: GS ), and frankly, it just seems like it’s just starting that.
Now, we’ll look at the daily chart, the same thing here. It’s a little choppier because it’s a daily chart. But let me zoom in here, the stock ran up here on massive volume in December. And since that time, it has essentially traded sideways, in this kind of range right here. It’s been one prolonged volatility squeeze, very, very low volatility, relative to all the stuff that’s come before.
You can see this is like a base within a bigger base or a longer base. We get a breakout here on massive volume on this daily chart. It bounces around here, gaps up here, and sucks in everybody that’s got to buy Goldman ( NYSE: GS ) right here on the gap, don’t ever do that. And then we get selling pressure on light volume.
We get a little weak three-day run here, and then a pullback lower. And what does that do? Well, it gets it right back into this channel here. But more importantly, it shakes out the weak hands and gets a little bit higher volume here with each day. But more importantly than just the volume, the stock gapped down below the 50-day moving average and closed below. That’s a bad, bad, bad thing.
You don’t want to see that unless the following day the stock gaps up over $17.00, but almost 5 percent. It gaps up but then it sells off, you’ve got to expect that. A pullback, I’m giving you the play-by-play here, a pullback, what, back down here? No, it didn’t even test the 50. So right in this area here is when, if you’re watching this stock, and admittedly I wasn’t, I missed this trade, but if you’re watching the stock, right in here you are seeing a real change in dynamic.
You’re seeing the 50-day moving average drifting upwards a little bit. A faster rate, a higher rate because of this breakout here. And you’re seeing a test of the 50 and then another test of the 50, and then the stock starts moving up. Green skyscraper here and another green skyscraper down here, so now we’re off to the races.
So what do we do here? Well, I’ll tell you this, the market sucks right now ( NYSEARCA: SPY ), more sucking ( INDEXNASDAQ: NDX ), more sucking ( INDEXDJX: .DJI ). For those of you that remember Ross Perot, here’s the giant sucking sound. Everything ( NASDAQ: SMH ) pretty much sucks. And so ( NYSEARCA: FFTY ) I get it as far as the, there’s always a bull market somewhere.
I would say the bull market is in real estate right now. It’s certainly not in bonds, it’s certainly not in stocks. Now, with that said, don’t lose hope. Because when things start going down like this, like across the board, it can bring out a lot of pessimism in traders, in you, in me. Don’t let it do that. These are opportunities, these are opportunities in waiting.
Think about it this way, you’re getting engaged to stocks that you like but you’re not married yet, you’re just not pulling the trigger yet. By the way, if you did pull the trigger, and you’re actually married, dude, there’s always divorce. And it’s easier to do with a stock than it is in real life, trust me, I know.
What you want to be doing is, you want to be looking at stocks that you want to be buying. One of them that comes to mind, obviously, is NVIDIA ( NASDAQ: NVDA ). Now, I wouldn’t buy this here. There’s nothing about NVIDIA ( NASDAQ: NVDA ), I own it, and I’ve been owning it for a long, long, long time. There’s nothing about this that makes me want to sell it.
There’s nothing about this that makes me want to buy it either. Because this has also fallen below the 50. It’s come back up and I wouldn’t exactly call this a big successful test, because it ain’t. They report earnings in about three weeks SMCI ( NASDAQ: SMCI ) reported, not really good price action there. AMD ( NASDAQ: AMD ) reported, not really good price action there. Micron ( NASDAQ: MU ), they’re out of the way but they’re not doing well either.
So the bottom line is, you look at a stock like NVIDIA ( NASDAQ: NVDA ) and say, okay, well that’s one that I want to buy. Well, you may get an opportunity to buy that at 700.00, which is a heck of a lot better than 850.00. I’m not saying, wait for that, I’m just telling you, this is not that. This is not the time to buy.
And while I’m at it here, since I’m on a riff, Tesla ( NASDAQ: TSLA ). This is not your stock for right now. At some point, you never want to count Elon out, I know a lot of you hate him, and that’s fine, I couldn’t care less. I think he is Tony Stark, the smartest guy around. There’s a lot of stuff that he just goes, “I don’t give an “S” about. I’m going to do what I’m going to do.
I totally respect that because it’s a rare thing these days when everybody’s running around with masks on because they either want to hide their identity from the stupid shit that they’re doing. Or because they’re broken from COVID. And if it’s you, yeah, I’m talking to you, you’re broken, it’s over.
Musk exposed a lot of that stuff. Tesla ( NASDAQ: TSLA ) has a lot of competition right now. The Chinese are eating their lunch a little bit because they can’t compete with lower prices. It’s nice when you are communist, you can do that. They can compete with lower-price cars, and they’re great at stealing technology, so go figure.
Musk has some work to do, but if you think that Tesla ( NASDAQ: TSLA ) is done, I don’t own any so I’m not talking my book, I would submit to you that you’re wrong. However, Tesla ( NASDAQ: TSLA ) is done for now. So you watch this stock, you wait for it to form some kind of a base or this kind of thing, this kind of big whoosh down, which, if it happens, I’m in. But for now, I’m telling you, I’ve got way too much stuff going on here. For right now, I want to sit tight on this and wait.
Back to Goldman ( NYSE: GS ), I would like to sit tight on this and wait as well. My pension has a longer-term position in this stock, not for a trade, just because diversification pretty much guarantees mediocre performance. So I guess we’ve got this in for mediocrity, we’ve had it for a while.
What you want to do is just wait a little bit. Wait for the stock to get ideally down to test 400.00 again, and test the 50 again. But wait for it to come back down a little bit, and it will, this is what it does. This is what all stocks do, they zigzag, and as soon as you think there’s going to be a zig without a zag, you’re going to get hurt. So you wait for the stock to come down here, then you buy it. And then you anticipate more upside from there.
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