u s stock focus potential corrective down move remains intact for goldman 1849702017

The recent horrendous 6% fall seen in Goldman Sachs (GS) share price from Monday, 17 April 2017 closing price of 226.26 to a recent low of 213.18 seen on 18 April 2017 had been mainly attributed to its latest Q1 2016 earnings results where it came in below expectations (5.19 EPS -consensus versus 5.15 EPS – actual). Since its current all-time high of 255.15 printed on 01 March 2017, GS had tumbled by 16%.

Goldman’s lacklustre earnings were caused by trading revenue where its Q1 revenue came in at U.S$3.36 billion which declined by 2.4% y/y.  To add salt to GS’s current disappointing trading operations, it was the only major bank that reported Q1 earnings that came in below expectations versus the rest of the pack (Citi, Morgan Stanley, Bank of America & JP Morgan).

Now, let’s take a look at its latest technical elements

Medium-term technical outlook on Goldman Sachs (GS)

(Click to enlarge charts)

Key technical elements

• From its major resistance zone of 250.70/255.15 (defined by the swing high areas of Oct 2007/Mar 2017 & 0.764 Fibonacci projection from the Nov 2008 low), GS has tumbled by 16% to print a recent low of 213.18 on 18 April 2017 (see weekly chart).
• The weekly RSI oscillator remains bearish where it still shows further downside potential towards an extreme level with the daily RSI oscillator remains cap below its resistances. These observations suggest that medium-term downside momentum of price action remains intact.
• The intermediate resistance stands at the 220.85/223.30 zone (former swing low of 27 March 2017 & the recent gapped down on 18 April 2017) (see daily chart).
• The key medium-term resistance stands at 2263.88 which is defined by the trendline resistance from February 2017 swing high area and the 61.8% Fibonacci retracement of the recent drop from 05 April 2017 high to 18 April 2017 low (see daily chart).
• The key medium-term supports rest at 119.17 (former swing high of 06 November 2015 and 1.00 Fibonacci projection from 01 March 2017 high) follow by 190.90/189.60 zone (former swing high area of October 2009 & a Fibonacci cluster).

Key levels (1 to 3 weeks)

Intermediate resistance: 220.85/223.30

Pivot (key resistance): 226.88

Supports: 196.00 & 190.90/189.60

Next resistance: 250.70/255.15

Conclusion

GS may see a minor rebound first towards the intermediate resistance zone of 220.85/223.30 with a maximum limit set at the 226.88 medium-term pivotal resistance before a new potential drop materialises to target the next supports at 196.00 with a maximum set at 190.90/189.60 zone.

On the other hand, a clearance above 226.88 is likely to invalidate the preferred corrective down move to see a squeeze up to retest the major resistance zone of 250.70/225.15.

Charts are from eSignal

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