Market Overview

Why Does JC Parets Not Like Goldman Sachs?

Why Does JC Parets Not Like Goldman Sachs?
Related GS
Yellen, Cohn In The Running For Next Fed Chair
Earnings Quality At Goldman Sachs Questionable, UBS Downgrades
Blue Chips, Small Caps Take Flight; Financials Lead, Oil Jumps 3.4% (Investor's Business Daily)

JC Parets, market technician and founder of Eagle Bay Capital, keeps track of the stock in the Dow 30, analyzing the companies every week.

In its most recent Dow 30 report, the firm provides some thoughts on Goldman Sachs Group Inc (NYSE: GS).

Weekly Chart

Structurally, Goldman is still in a nice uptrend. However, it is very close to the key resistance from the 2009 highs. Momentum is trying hard to break this downtrend line and getting closer. However, bulls have not seen a favorable risk/reward profile for a while, since the 200-week moving average is pretty flat and relative strength has experienced a two-year downtrend.

Related Link: Expert Explains How To Play Merck In 2 Charts

Taking this into account, Eagle Bay only wants to be long if prices surpass all this overhead supply from the 2009 highs.

"I would argue that a sustained breakout above the 2009 highs would be very bullish and would give us a target of 250 based on the 2007 highs," Parets commented.

Daily Chart

Short term, Eagle Bay has only wanted to be long Goldman above last January's highs (shaded in gray in the chart above). Based on the weekly timeframe, the firm sees (and has seen, over the past couple of months) limited upside. This is why they incorporate multiple timeframes.

Related Link: 2 Essential Charts For Microsoft Investors

"I haven't liked this very much after breaking the uptrend line and former resistance from last January, especially with momentum now in a bearish range hitting oversold conditions on this sell-off," Parets explained.

"This is not for me and remain neutral as we failed at resistance from this broken uptrend line from the spring and 161.8 percent Fibonacci extension of the Spring 2014 correction," he concluded.

Image Credit: Public Domain

Latest Ratings for GS

Jul 2017UBSDowngradesBuyNeutral
Jul 2017Keefe Bruyette & WoodsDowngradesOutperformMarket Perform
Jul 2017OppenheimerMaintainsOutperform

View More Analyst Ratings for GS
View the Latest Analyst Ratings

Posted-In: Dow 30 Eagle Bay JC ParetsAnalyst Color Technicals Analyst Ratings Trading Ideas


Related Articles (GS)

View Comments and Join the Discussion!