4 Trade Ideas for Goldman Sachs: Bonus Idea

• Posted by Greg Harmon
• on February 6th, 2023

Here is your Bonus Idea with links to the full Top Ten:

Goldman Sachs, $GS, comes into the week running up to resistance. This is from the bottom of the range that retraced 50% of the October to November run higher. The Bollinger Bands® are open higher to allow a move. The RSI is rising in the bullish zone with the MACD positive and moving higher.

There is resistance at 374.60 and 377 then 388.50 and 390.50 before 399 and 403.50 then 409.50. Support lower comes at 365 and 356. Short interest is low at 1.2%. Enter long on a move over 374.60 with a stop at 365. The stock pays a dividend with an annual yield of 2.70% and will trade ex-dividend March 1st. The company is expected to report earnings next on April 12th.

The February options chain shows the open interest building from 380 to a peak at 340 on the put side. On the call side it is spread from 340 to 425, biggest at 340 and 400. The March chain also builds from 370 to a peak at 330 on the put side. The call side is spread from 330 to 420, biggest at 400 then 380. The April chain shows biggest open interest at the 350 Put and strong from 360 to 370 on the call side.

Goldman Sachs, Ticker: $GS

Trade Idea 1: Buy the stock on a move over 375 with a stop at 365.

Trade Idea 2: Buy the stock on a move over 375 and add a March 370/355 Put Spread ($5.60) while selling the April 400 Calls ($4.55).

Trade Idea 3: Buy the February/March 385 Call Calendar ($3.13) and sell the February 355 Put ($1.82).

Trade Idea 4: Buy the April 340/375/400 Call Spread Risk Reversal ($3.20).

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After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which with the first month of the year in the books with positive performance, statistically the prospects for a positive year are good, while near term markets also look strong.

Elsewhere look for Gold to pause in its uptrend while Crude Oil drops to the low end of the consolidation range. The US Dollar Index looks to pause in the downtrend while US Treasuries consolidate in their bounce off lows. The Shanghai Composite looks to pause its uptrend while Emerging Markets may pause their move higher as well.

The Volatility Index looks to remain normal and stable making the path easier for equity markets to the upside. Their charts look strong, especially on the longer timeframe with the SPY confirming an intermediate term uptrend while the IWM and QQQ have established short term uptrends and are closing in on the intermediate term. On the shorter timeframe the SPY, IWM and QQQ all moved back within the Bollinger Bands Friday to ease tight momentum. Use this information as you prepare for the coming week and trad’em well.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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