Why do I like Goldman Sachs (GS) more than JP Morgan (JPM) and Morgan Stanley (MS)? (May 18, 2015)
GS JPM CMLS MS GS
I want to look at Goldman Sachs ( NYSE:GS ) here, which is why we have a chart of Goldman Sachs ( NYSE:GS ) up here. This is a weekly chart and these other major brokers like, lets look at JPM ( NYSE:JPM ), which looks about the same. Morgan Stanley ( NYSE:MS ) has been drifting sideways; they’re all looking like they could go higher but I particularly like Goldman Sachs ( NYSE:GS ), really for one reason only over JPMorgan ( NYSE:JPM ); this may sound silly but this is the way traders trade, because of the even number, because it’s broken out above 200.00.
I know it sounds silly but traders look at even numbers. It’s broken out above 200.00 and is now moving higher, just a little bit, but we would expect any pullback to find support right around $200.00, which was where resistance was here. So that’s the weekly chart. Now if we look at the daily chart you can get a little be better sense of what’s happening. This is creative cup and handle drawing, watch it. Now anybody who knows anything about cup and handles is going to look at this and say, “Really? Really? You’re trying to make this out to a cup and handle?” No, I’m actually not, I’m just pointing out the similarities.
Look at, for example, the 50-day moving average drifting higher, and then isn’t this kind of drifting in to a nice little bowl and then where are we? We’re coming back here, a tag of the 50 here, a tag of the 50 here, and here. So once this thing broke down and then back through the 50-day moving average this has really been support.
At the same time you can see the stock having printed a new high relative to this one, but not by that much, and then drifting sideways. And what was the volume when it was drifting sideways? It was lower than average, not a lot, but hey, Goldman Sachs ( NYSE:GS ) is Goldman Sachs ( NYSE:GS ), it kind of gets traded. So we’ve got a low volume pullback and then a breakout and then finally just today a decisive move above this last high here, from a month or so ago on the 16th, where the stock gapped up and fell. So this time the stock didn’t gap but it closed at a new high, or at least a new high in the last 7 or 8 years.
The bottom line is this: these brokers are starting to move higher, they’ve actually been moving a bit, but in particular I like Goldman Sachs’ ( NYSE:GS ) upside because it’s coming out of a nice technical pattern, you can see where buyers stepped in a bit here and now we’re just starting to pick up. What I would suggest you do it this: watch for higher volume. If the stock does continue to advance what you want to see are these volume bars moving higher as opposed to lower.
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