Critical Support Test Challenge for Goldman Sachs GS

Jul 19, 2017: 8:43 AM CST

Goldman Sachs (GS) reported positive earnings that beat expectations yesterday… yet the stock fell.

Shares now face a critical “Make or Break” support challenge at a key confluence level.

What is it and what’s the short-term trade from here?  Let’s plan it:

Goldman Sachs GS Flag Support

As a long-term trader, it still frustrates me to no end to see a stock beat earnings yet collapse lower.

That’s one reason I focus so much of my trading on technical analysis – charts make sense!

Anyway, earnings aside, the chart reveals Goldman Sachs (GS) shares to be at a critical confluence support pivot.

We’re specifically seeing the overlap of the rising 200 day SMA (red) with the lower rising “flag” trendline of a rising parallel trendline channel (yellow highlight).

Ideally shares bounce here and trade the bullish pathway toward the $230 level again.

However, traders should be ready to short-sell (or take stops) on a breakdown/breakout beneath this support level which could collapse shares quickly toward the $210 per share prior low from June.

Even if you’re not trading this stock at this juncture, it should be fun to watch what happens next for your educational reference.

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Corey Rosenbloom, CMT

Afraid to Trade.com

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