A member request came through the member’s forum for a pattern update on the Goldman Sachs Group (GS). GS was actually one of the stocks I selected as one of my 2 favorites in a recent banking update. More on that update in a little bit.

For now, let’s get an update on the long-term trend for GS and then the a look to see if any chart patterns are developing.

The Goldman Sachs Group (GS)

You know the drill. This first chart for the Goldman Sachs Group (GS) is a 5 year monthly candlestick chart to look at longer-term trends for the stock. I want to take another look at the long-term trend before I go to a weekly candlestick chart to look for chart patterns.

I last reviewed a monthly chart for Goldman Sachs Group (GS) in this update “9/21/2017 – My Favorite Bank Stock“. That chart was a 20 year monthly candlestick chart though, not my typical 5 year monthly chart. I went to a 20 year chart in the previous update in order to view Anchor Point #1 from the black Fibonacci Extension Tool on the chart in that update. I don’t like posting charts where you can’t see the beginning of the tool I am using.

On this 5 year chart, I placed a Fibonacci Extension Tool on what I feel is a completed Bullish Impulse wave and its correction. I outlined the 5 waves to the upside with trendlines. The 100% and 161.8% Target Lines from the Fibonacci Extension Tool are the most probable price targets for the next Bullish Impulse wave pattern.

The MACD Histogram is showing its second month of continued buying momentum. It never did reach the zero mark during its correction, a bullish sign for a continued advance after the correction.

I would anticipate a possible short-term consolidation (a month or so) around the resistance area from the Bearish Engulfing candlestick pattern. The resistance area from the candlestick also coincides with the 38.2% Target Line from the Fibonacci Extension Tool. Once the resistance area from the candlestick is broken though, the [s2If !current_user_can(access_s2member_level1)]……

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I review upside price targets for the company’s share price as well as the probability of getting there. The upside price targets are based on a chart pattern identified on its weekly candlestick chart.

If you are not a Trendy Stock Charts member, consider joining today! There are several different subscription plans available.[/s2If][s2If current_user_can(access_s2member_level1)] 100% Target Line is in play. The 161.8% Target Line is off the top of the chart but resides at $398.85.

The target time frame for 100% Target Line would be approximately 6 months. I made that estimate by analyzing the first Bullish Impulse wave. It took 10 months to develop. The current Bullish Impulse wave pattern appears to be in its 4th month of development. Elliott waves tend to develop with a lot of symmetry, so that is how I estimated this time frame.

GS – Chart Pattern Search

When reviewing stock charts for chart patterns, I tend to find the weekly chart easiest to use during the process. While chart patterns can be identified on daily charts, weekly charts seem to produce more reliable results. Investors Business Daily, an excellent resource for us home investors, monitors chart patterns on weekly charts as well.

This next chart is a 3 year weekly candlestick chart for Goldman Sachs. It appears that Goldman Sachs share price is forming a Cup chart pattern starting in April 2017. It would appear to have a couple of weeks to finish the right side of the Cup pattern.

When a Cup chart pattern forms a Handle, look for an approximate 10-15% pullback from the right side of the Cup. The $255 resistance level noted on the first chart above could be the approximate top for the right side of the Cup pattern.

There is some decent buying volume as the right side of the Cup Pattern is developing. That favors a positive breakout. The average breakout for a Cup With Handle is 34%. That is according to Thomas Bulkowski’s book that I talk about in my recommended reading material.

A 34% gain from $255 is $341.70 which is slightly higher than the 100% Target Line on the first chart above.

GS – Point & Figure

The Point & Figure Charts for the Goldman Sachs Group (GS) reflect the following price targets:

High/Low P&F Chart – $275 Bullish Price Objective

Closing P&F Chart – $303 Bullish Price Objective

These bullish price objectives seem to confirm a breakout from the Cup chart pattern. The bad part about Point & Figure Charts is that they do not give any sort of time frame as to when the price objectives may be met. That is where other technical analysis methods must be used, such as my estimate using symmetry for the Impulse waves.

The Goldman Sachs Group (GS) Summary

If you are not long already, consider going long now and using the $255 price level as a short-term sell target. The $255 price level should offer resistance for a short time period on this initial rebound. That resistance should help the Cup chart pattern to develop a handle. As long as the selling remains light, any pullback from the $255 price level though should be bought in earnest. With a $325 medium-term and a $398 longer-term price target, what is not to like?

A breakout $255 should move rapidly. It will be hard to get in at that point with few pullbacks. Make it easy on yourself and start a scale-in process soon if you haven’t already.

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