Stock of the day: Goldman Sachs

On this Tuesday, April 12^th, we’re taking a look at the situation with Goldman Sachs. We’d previously analysed this instrument back in January, right after the price set a major sell signal. At the time, we were quite precise in our scenario for this instrument:

“What happens now after this bearish gap is that traders will most probably try to pull the price higher to close this gap. This commonly happens and we shouldn’t be surprised if it does. In the mid-term, sentiment remains negative, but in the short-term, some kind of an upswing can be seen on the horizon. The negative sentiment stays with us, as long as the price stays below the neckline. Chances for the comeback above exist but they are really small at this moment.”

Interestingly, that’s precisely what happened. The price rushed to close the gap, which tested the neckline as a resistance. That was it though, and the long-term sell signal prevailed dragging the price lower which, of course, is the scenario we’d also predicted back in January.

Most recently, we can see that the price being drawn is completing the wedge formation (green). On Thursday, the price bounced from the lower line of the wedge using a hammer candle (yellow). That could be the start of something good. Of course it’s still too early to tell, and this alone isn’t sufficient but the price breaking the upper line of the wedge would definitely be a great buy signal.