GS still stuck within tight trading range
Goldman Sachs Group Inc. (GS) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
GS finished Wednesday at 200.68 gaining $2.68 (1.35%), significantly outperforming the Dow Indu. (0.13%). Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (GS as at Sep 16, 2020):
Wednesday's trading range has been $5.73 (2.89%), that's slightly above the last trading month's daily average range of $4.93. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for GS. Prices continued to consolidate within a tight trading range between 197.98 and 205.35 where it has been caught now for the whole last trading week.
The market managed to close back above the 100-day moving average at 199.93. When this moving average was crossed above the last time on June 29th, GS gained 2.15% on the following trading day. Unable to break through the key technical resistance level at 202.45 (R1), the share closed below it after spiking up to 203.80 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. After having been unable to move lower than 197.98 in the prior session, Goldman Sachs found buyers again around the same price level today at 198.07.
Although the stock is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Selling might accelerate should prices move below the nearby swing low at 197.98 where further sell stops could get triggered. Trading close to July's low at 195.00 we might see further downside momentum if potential sell stops at the level get activated.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to previous low" stand out. Its common bullish interpretation has been confirmed for Goldman Sachs. Out of 489 times, GS closed higher 54.19% 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 two trading days, showing a win rate of 52.35% with an average market move of 0.05%.