Market Overview

Goldman Recovers from Op-Ed Losses


By David Becker,

Goldman Sachs (NYSE: GS) has been a lightning rod for regulatory scrutiny, as the firm has been compared to the evil empire Darth Vader.

On Wednesday, a New York Times editorial written by a former Goldman executive was a scathing recount of how toxic was the working environment at the firm. Despite the negative press and the recent suits completed by the SEC, GS has rallied more than 30% so far in 2012.

The stock price popped on Tuesday after the Federal Reserve announced the results of the bank stress tests, and the ability of 19 large US banks to handle a situation similar to the recent 2008 financial crisis. GS closed above resistance levels, which were the 2012 highs near $121 on Tuesday, and now has returned to test former resistance as support.

Short-term resistance is seen near the 20-day moving average near $117 and then the 50-day moving average near $111. Weekly upside resistance on a close above $128 is seen near $140.

Momentum is beginning to build in the banking sector as the 50-day moving average crossed above the 200-day moving average on Wednesday. This cross, known in the industry as the "golden cross", usually signals that a medium to long-term trend is in place. A weekly close above the 50-week moving average would also likely prove to add momentum to the stock price.

The MACD (moving average convergence divergence index) is reflecting the beginning of increasing momentum, as the index level is just moving into positive territory.

The MACD created a buy signal Thursday where the spread 9the 26-day moving average minus the 12-day moving average) crossed above the 9-day moving average of the spread. The RSI remains near 60, which is on the upper end of the neutral level.

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The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

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