Goldman Looks Bullish into Earnings

• Posted by Greg Harmon
• on October 17th, 2011

Goldman Sachs will release earnings before the market opens Tuesday morning. There have been many rumors around them and some suggest that their earnings may even be negative. But the charts paint a positive picture leading into the announcement. Does the market know something? Let’s take a look.

Weekly

Starting with the weekly chart it fell out of a nearly 2 year long channel in August and has been trending lower since. But over the last 3 weeks that fall has stalled and it is re-approaching the 61.8% Fibonacci retracement of the rise from the March 2009 lows to the 2010 highs. It posted a series of two bullish reversal candles to close September and they have been confirmed higher last week and the one day of this week. The Relative Strength Index (RSI) has also bottomed and is moving back toward the technically over sold line and the Moving Average Convergence Divergence (MACD) indicator is rolling back toward zero. This is a bullish chart in the short run.

Daily

Moving to the daily chart, it has consolidated out of the recent downward channel ad has a rising RSI and positive and increasing MACD that support more upside. So the daily chart is also biased to the upside heading into earnings.

What happens after the report is released is anyone’s guess. But the charts suggest that the worst may be over for Goldman Sachs.

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