By: Scott Redler
For weeks, GS has been made into the bad guy as the SEC launced fraud allegations against the revered bank. Even criminal charges have been mooted for Goldman traders involved directly in the alleged fraud. The scandal has sent the stock into a tailspin, and we have been looking for the right time to potentially get involved to the long side. Thus far, the only trades we have gotten are quick intraday reflex moves, but a technical pattern appears to be developing that could provide a chance to capture a bigger move.
Also, more banks are being investigated for potential fraud. Morgan Stanley was singled out today, and I hear Duetsche Bank could be next. JPM stock has also been trading like there is trouble on the horizon. The more banks called in, the more
chances the group settles, and it’s not just GS specific.
I see a descending channel in GS. This pattern typically resolves itself to the upside. Today was a strong day for GS and I nibbled long. The pattern ignites if we get a trade through and close above 148-149. The stock could see 153-154 pretty quick. Then bigger resistance is up around 160-162.
