GS breaks back below 20-day moving average
Goldman Sachs Group Inc. (GS) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, GS finished the week 4.69% higher at 179.93 after edging lower $0.17 (-0.09%) today on low volume, slightly underperforming the Dow Indu. (-0.04%) ahead of tomorrow's Memorial Day market holiday. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (GS as at May 22, 2020):
Friday's trading range has been $2.58 (1.43%), that's far below the last trading month's daily average range of $4.87. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for GS.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, three candlestick patterns are matching today's price action, the Hanging Man and the Northern Doji which are both known as bearish patterns and one neutral pattern, the Doji.
Prices are trading close to the key technical support level at 177.56 (S1). The stock closed back below the 20-day moving average at 179.99. After having been unable to move lower than 177.68 in the previous session, the market found buyers again around the same price level today at 178.06. The last time this happened on April 24th, GS gained 3.69% on the following trading day.
The share shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might accelerate should prices move above the close-by swing high at 183.83 where further buy stops could get triggered. Selling might speed up should prices move below the nearby swing low at 177.68 where further sell stops could get activated. As prices are trading close to May's high at 185.91, upside momentum might accelerate should Goldman Sachs mark new highs for the month.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hanging Man" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Goldman Sachs. Out of 67 times, GS closed higher 53.73% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 62.69% with an average market move of 1.24%.