Earlier this morning The Goldman Sachs Group, Inc (NYSE: GS) reported a solid Q4 earnings per share of $5.60 versus consensus estimates at $3.64. The stock has had a sharp rally off the November lows and now finally moved into better resistance. Let’s look at the charts;
Much along with the broader market, the banks and financials, The Goldman Sachs Group, Inc (NYSE: GS) included, rallied off the November lows. Simply put, the financials confirmed the rally in the broader market and kept it alive…much in contrast to the technology sector by the way, which has been lagging courtesy of Apple Inc, (NASDAQ: AAPL).
More specifically to the stock price of The Goldman Sachs Group, Inc (NYSE: GS), with this morning’s open gap higher the stock is bumping into the 61.80% Fibonacci retracement (resistance) level of the move from the 2011 highs down to the 2011 lows. This is easily visible on the weekly chart below. The stock has now rallied around 23% off the 2012 November lows without catching a real breadth, now is as good a spot as any for the stock to rest a little and consolidate.
A little closer up on the daily chart of this stock we see the November – January rally a little better. Of note this morning is the up-gap, which comes following a doji (unchanged) candle yesterday. We need to see a daily close on the chart today to get a better reading of what the candlesticks are telling us, but any weakness the rest of today or tomorrow in the stock will either way shape a bearish candlestick formation.
Given the fact that the broader market has traded higher along with the financials, the momentum oscillators such as Stochastics and Relative Strength Index are somewhat less relevant to look at. Either way however, note that accoriding to those two oscillators The Goldman Sachs Group, Inc (NYSE: GS) has been overbought since mid December.
The sharp rally in recent weeks has now finally brought this stock into good Fibonacci resistance. This coupled with overbought momentum and very suspicious looking daily candles makes this stock one I do not want to chase. On the contrary, any weakness in the stock today or in coming days would set it up as a solid short-side candidate for a swing trade.