Triangle and Divergence in Goldman Sachs

Jan 24, 2008: 5:53 PM CST

Financial giant Goldman Sachs (GS) recently posted two major classic patterns on its daily chart worth an educational mention:

First, notice the lengthy declining triangle formation (pattern) both in the actual price and the narrowing momentum oscillator.

Price ejected down from the horizontal support line (base) and formed a retest at the throw-back point, which corresponded nicely with the 20 period moving average that set up an extremely high probability trade (with edge).

As price made new relative lows (January 22nd), the momentum oscillator curved upwards and made a higher low (highlighted with the green line at the far right side of the chart). This served as a non-confirmation of lower prices, and allowed savvy traders to enter a quick “scalp” back to the declining 20 period moving average (another high probability trade with edge).

Price now sits at the key moving average, and the orientation of the three key averages is as bearish as it gets (20 beneath the 50, which is beneath the 200).

While a reversal may indeed occur, I simply wanted to point out a couple of examples of high probability trade set-ups that formed as a result of price action on the daily chart.

Adam Hewison further discusses trading triangles:

Always annotate your own charts based on how you view opportunities to trade and manage risk.

5 Comments

5 Responses to “Triangle and Divergence in Goldman Sachs”

  1. Stock Market » Triangle and Divergence in Goldman Sachs Says:

    […] Here’s another interesting post I read today by Corey Rosenbloom […]

  2. ilunga Says:

    lol
    gap faded again
    wall street loves GAP FADE…

  3. Corey Rosenbloom Says:

    Not only does Wall Street love gap fades, but I do too.

    Some of my largest profits as of late have come from classic gap fade patterns and standard bull/bear flags.

    Strange, it’s the simplest setups that are making me the most money now.

  4. Connecting News, Commentaries and Blogs at NineReports.com Says:

    Related News Stories …

    Goldman Sachs cuts Ashland stake …Blogged about at Triangle and Divergence in Goldman Sachs – afraid to trade.com blog – overcoming stock market fears, Goldman Sachs Asset Management L.P. has reduced its holdings of Ashland Inc. stock to 2.3 million …

  5. Payton_vege Says:

    Amazing write-up! This could aid plenty of people find out more about this particular issue. Are you keen to integrate video clips coupled with these? It would absolutely help out. Your conclusion was spot on and thanks to you; I probably won’t have to describe everything to my pals. I can simply direct them here!