08-11-2007: Time to buy Goldman?

polpolik · Aug 10, 2007

As a pure technical trader, I believe now is the time to buy GS.

1) On a weekly chart, finally gravestone doji during a downward move with a huge head.

2) Huge volume signalling a downward price move exhaustion

3) Oversold on RSI and Stoch

It doesn't get better than this for the bulls.

(I own 300 GS at $180)

showyouwang · Aug 10, 2007

Gravestone doji doesn't look like that, that is a spinning top - a mark of consolidation.

Oversold but... oversold can stay oversold for a long period of time.

polpolik · Aug 11, 2007

Quote from showyouwang:

Gravestone doji doesn't look like that, that is a spinning top - a mark of consolidation.

Thanks for the correction.

[/B]Oversold but... oversold can stay oversold for a long period of time. [/B]

Of course, I'm not saying I'll be 100% correct but the odds that everything falling into place plus a strong WEEKLY support at 180 (2 weeks it's tried and failed to break) and the volume shows strong buying at this level.

My target is around $200 on this one depending on next week's market action.

ASusilovic · Aug 11, 2007

Quote from polpolik:

Thanks for the correction.

Of course, I'm not saying I'll be 100% correct but the odds that everything falling into place plus a strong WEEKLY support at 180 (2 weeks it's tried and failed to break) and the volume shows strong buying at this level.

My target is around $200 on this one depending on next week's market action.

What about some fundamental analysis ? Do you think GS, MER, BSC, LEH, JPM and others will not suffer from the hedgefund debacles and credit crunch ? At least their underwriting business will suffer in relation to ABS, or ? And what about hedgefunds 4:1 leverage meltdown to 1:1 => less income from HF business ? And what about Private Equity standstill ?

polpolik · Aug 11, 2007

Quote from ASusilovic:

What about some fundamental analysis ? Do you think GS, MER, BSC, LEH, JPM and others will not suffer from the hedgefund debacles and credit crunch ? At least their underwriting business will suffer in relation to ABS, or ? And what about hedgefunds 4:1 leverage meltdown to 1:1 => less income from HF business ? And what about Private Equity standstill ?

My analysis is purely from a technical standpoint as well as most of my trades. I don't pay much attention to fundamentals when I trade. the chart tells me what I need to know in most cases.

Also, this is a short term play. The weekly volume of >100M tells me there are people that do consider the points you made but still think it's convincing enough to buy at this level creating a strong weekly support. I don't let fundamentals get in the way of my trading otherwise, I would have been shorting this market when the DOW was at 11,000.

makloda · Aug 11, 2007

Quote from ASusilovic:
What about some fundamental analysis ? Do you think GS, MER, BSC, LEH, JPM and others will not suffer from the hedgefund debacles and credit crunch ?

No?!?!?!? Why?!?!?!?! It seems The Boyz were smart and sold off all their junk products to their European counterparties: BNP Paribas, IKB Germany and WestLB!!!

showyouwang · Aug 11, 2007

You never know if a trade will work unless you bet money on it.

My stance:

I don't see any support at 180 on the candle chart, and you are late to the short covering rally since there has already been a 50% retrace to 200. Spinning top doesn't mean reversal, it just means indecision and GS could very well continue its slide downwards especially with the weak financial sector and weakening broader market.

My advice is like always, be nimble with your stops!

lwlee · Aug 11, 2007

Well if nothing else, GS is a better play than BSC.

polpolik · Aug 11, 2007

Quote from showyouwang:

My advice is like always, be nimble with your stops!

Of course, that goes without saying on any trades

I'll scale out as it goes and I don't let profitable trades go into a bad loss. Stops at breakeven are usually in place when it moves at least 2 points.

Good trading to all of you.

tmarket · Sep 14, 2007

Quote from polpolik:

As a pure technical trader, I believe now is the time to buy GS.

You may have been a little early and I may be a little late, but here goes. GS $186 area may be a good long entry. Strategy has 6.3 profit factor. Entry Buy 09/13/07 12:30 Buy $187.52

(own a few hundred shares from $186 from this AM, 09/14/07 sell off).