4 Trade Ideas for Goldman Sachs: Bonus Idea

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

Goldman Sachs, $GS, started out of consolidation in November and ran to an eventual high in June. It has since pulled back and settled into a consolidation around the 200% extension of the retracement of the pandemic drop. The Bollinger Bands® are squeezing in, often a precursor to a big move. It comes into the week rising toward the top of resistance with the RSI possibly stalling and the MACD trying to cross up into positive territory. There is resistance at 381 and 393.25. Support lower comes at 368 and 363 then 350. Short interest is low at 1.2%. The stock pays a dividend with an annual yield of 2.14% and starts trading ex-dividend on August 31st.

The company is expected to report earnings next on October 12th. The August options chain shows a bell curve of open interest on the put side from 325 to 380, with the peak from 355 to 365. On the call side it builds from 350 to a top at 390 and drops after 400. The September chain has biggest open interest from 300 to 360 on the put side and spread from 330 to 420 on the call side. Finally, the October chain is the first to cover the next earnings report. It has biggest open interest on the put side at 330 but spread from 325 to 360. On the call side it builds from 345 to a top at 385 and tails from 400.

Goldman Sachs, Ticker: $GS

Trade Idea 1: Buy the stock on a move over 381 with a stop at 368.

Trade Idea 2: Buy the stock on a move over 381 and add an August 370/350 Put Spread ($5.45) while selling the September 400 Calls ($4.60).

Trade Idea 3: Buy the August/October 390 Call Calendar ($7.00) and sell the August 350 Puts ($2.85).

Trade Idea 4: Buy the October 345/380/400 Call Spread Risk Reversal for a $1.10 credit.

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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 one week left in July, saw equity markets had shaken off a threat to the downside, with some reversing to all-time highs.

Elsewhere looks for Gold to consolidate while Crude Oil looks ready to continue the move higher. The US Dollar Index continues to drift to the upside while US Treasuries may be ready to pullback in their uptrend. The Shanghai Composite looks to continue in consolidation while Emerging Markets pullback in consolidation.

The Volatility Index looks to remain very low making the path easier for equity markets to the upside. Their charts look strong, especially on the longer timeframe. On the shorter timeframe both the QQQ and SPY have reset on momentum measures and are moving in the next leg higher. The IWM has also recovered from a breakdown and may be ready to join them to the upside, out of consolidation. 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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