4 Trade Ideas for Goldman Sachs: Bonus Idea

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

Goldman Sachs, $GS, comes into the week approaching the all-time high. from two weeks ago. It has a RSI rising in the bullish zone with the MACD positive and turning higher to avoid a cross down. It had been extended from the 20 day SMA when it made that high and with the two week sideways price action is now much tighter to it. There is no resistance above 504. Support lower sits at 492 and 484 then 480 and 471. Short interest is low at 1.7%. The stock pays a dividend with an annual yield of 2.40% and will trade ex-dividend on August 30th.

The company is expected to report earnings next on October 15th. The August options chain shows biggest open interest at the 470 put strike and then at the 480 call with the 520 and 510 call strikes also large. In the September chain the 480 put strike has the biggest open interest. on the call side it is biggest at 515 and then 500. The October chain covers the earnings report and has biggest open interest at the 450 put strike and much larger open interest at the 510 and then 500 call strikes.

Goldman Sachs, Ticker: $GS

Trade Idea 1: Buy the stock on a move over 504 with a stop at 492.

Trade Idea 2: Buy the stock on a move over 504 and add a September 495/480 Put Spread ($6.45) while selling the October 550 Calls ($6.25).

Trade Idea 3: Buy the September/October 520 Call Calendar ($6.40) while selling the September 470 Put ($6.20).

Trade Idea 4: Buy the October 465/505/525 Call Spread Risk Reversal (45 cents).

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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 three trading days left in July, saw large cap and tech focused index equity markets showing weakness with small caps continuing to hold strong.

Elsewhere look for Gold to continue its consolidation in the uptrend while Crude Oil consolidates in a tightening range. The US Dollar Index continues to drift in broad consolidation while US Treasuries consolidate in their downtrend. The Shanghai Composite looks to continue the short term move lower while Emerging Markets continue to hold their newfound short term uptrend.

The Volatility Index looks to remain low making the path easier for equity markets to the upside. This is with the backdrop of the July FOMC meeting and non-farm payroll reports next week among many large cap tech earnings reports. The charts of the SPY and QQQ look setup for more downside on the shorter timeframe and possibly the longer timeframe as well, but with no real damage in the weekly chart at this point. The prevailing narrative has been the rotation into small cap IWM and it is showing relative strength, but more in a consolidative mode then a full thrust forward this past week. A new high Monday could change that perspective fast. 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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