GS drops to lowest close since July 9th
Goldman Sachs Group Inc. (GS) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, GS ended the month 0.17% higher at 197.96 after losing $1.57 (-0.79%) today, significantly underperforming the Dow Indu. (0.44%). Today's close at 197.96 marks the lowest recorded closing price since July 9th. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (GS as at Jul 31, 2020):
Friday's trading range has been $3.33 (1.67%), that's below the last trading month's daily average range of $5.35. 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 previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, three candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern which is known as bullish pattern and two bearish patterns, the Bearish Short Candle and the Black Candle. The last time a Last Engulfing Bottom Pattern showed up on June 19th, GS gained 0.89% on the following trading day.
Prices are trading close to the key technical support level at 195.15 (S1). After having been unable to move lower than 196.30 in the prior session, the market found buyers again around the same price level today at 196.51.
Though the stock is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could accelerate should prices move above the close-by swing high at 203.89 where further buy stops might get triggered. Selling could speed up should prices move below the nearby swing low at 196.30 where further sell stops might get activated. Further selling could move prices lower should the market test June's close-by low at 188.51.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous High" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Goldman Sachs. Out of 520 times, GS closed higher 55.58% 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 53.46% with an average market move of 0.49%.