Goldman Sachs Not Seeing Clear Skies Like Others In The Rally

Goldman Sachs Group Inc GS has rallied just under 10 percent from the lows set two weeks ago for the stock and the broader market. Unlike many stocks in better technical condition, however, Goldman Sachs shares have thus far failed to conquer technical "correction resistance."

Will the stock, and the market, pull back and consolidate the recent gains? Or will Wednesday's FOMC announcement throw more gasoline on the bullish fire that has been burning since mid-October?

Let's take a look at Goldman Sachs' fundamentals and technicals to try to find some answers.

What The Bulls See

• A 1.3 percent dividend yield, which is not a bad add-on if shares are generally rising.
• Fair valuation metrics: A price-to-book of 1.18 and a price-to-sales of 2.37.
• Strong net profit margins of 24.26 percent.
• $717 billion in cash equivalents versus only $414 billion in total debt.

What The Bears See

• A heavy overall debt load versus assets owned, as evidenced by the debt-to-equity ratio of 490.1 percent.
• A PE of just over 11 that seems expensive when compared to 2015 estimated growth in revenues and EPS near the flat line.

The Technical Take

Technicians note that Goldman Sachs is facing key "correction resistance" at the $186.37 level, just above current prices for Goldman Sachs. A failure and downside reversal there will lead to at least a pullback to the $168-$171 range and possibly lower. On the other hand, a break and close above that level would lead to an acceleration to the upside with the next potential stopping point being $190.01.

Nimble and aggressive shorts will be taking their shots at the Goldman trade near current prices and all the way up to the $186.37 level. Of course, any close above that level may spur on a flurry of short-covering.