Last updated on April 12th, 2023 at 09:18 pm
In this post, we will be analyzing Goldman Sachs (GS) stock using a weekly chart and applying technical analysis to identify potential entry and exit points for traders and investors.
The first step in technical analysis is to identify the trend. Looking at the weekly chart of GS, we can see that the stock just hit the support at around $300 and bounced back. The stock is trading in a symmetrical triangle since a while and is waiting to break out of it. So, there is no clear upward or downward trend.
Support and resistance levels
Next, we can identify the key support and resistance levels on the weekly chart. The support level is the price level where buying pressure is expected to emerge, while the resistance level is the price level where selling pressure is expected to emerge.
From the weekly chart, we can see that the stock price hit the 50 weekly moving average resistance at around $330 and traded downwards. The support of the stock seems to be increasing steadily and is somewhere in the $305 range. Below that level, there is a strong 200 weekly moving average support at $291.
Technical Indicators
Technical indicators can also be used to identify potential entry and exit points. In this analysis, we will be using the moving average convergence divergence (MACD) indicator and the relative strength index (RSI) indicator and stochastics.
• MACD (Moving Average Convergence Divergence) is a good measure to identify the changes in trends and stock momentum. The MACD (violet) line is below the signal (orange) line indicating a bearish trend right now. The trend has been this way for a few weeks. Form the chart, I would wait for a little more time before buying it.• RSI (Relative Strength Index) is a good indicator to determine if a stock is overbought or oversold. Generally, when the RSI crosses above 30 from below, it may indicate a buy signal, and when the RSI crosses below 70 from above, it may indicate a sell signal. The overall RSI trend is currently downwards at around 44. This means that the stock price may go a bit more down before it reverses the trend.
• Stochastics is another technical indicator that can help investors determine if the stock is likely to continue in its current direction or if there may be a change in trend coming. When the black line crosses over the red line, it means a bullish sign and vice versa. Currently the black line just crossed over the red line from the lower band. This may mean that the stock is starting to trend upwards soon.
At what price should I buy Goldman Sachs stock?
Based on all the indicators, it looks like the stock has been trading low since a while and it is starting to show signs of a trend reversal. Potential long-term investors could start monitoring the price to buy the stock. The sellers seem to be exhausted and it looks like buyers are starting to gain control.
For long term investors looking for an optimum entry point, we are technically in a buy range. However, I would wait for the stock to trade in the range $300 to $305 which is the range between the 200 weekly moving average and the support to buy the stock.
As with all investments, it is important to conduct your own research and analysis before making any trading decisions.
To know the entry point of its competitor, click on: Bank Of America, JPMorgan Chase
