Make This Trade

sspencerGeneral Comments, Steven Spencer (Steve's) Blogs, Technical Plays2 Comments

Goldman Sachs (GS) is significantly weaker than the market right now.  Just a few examples: On October 29th after having rallied strongly for two days it gave back almost all of its gains in one day; as the S&P has consolidated and shown strength the past few days GS has sold off sharply on negative chatter; it dropped four points yesterday after an analyst lowered its price target intraday: in the premarket today it is up less than half as much as the S&P on a percentage basis.Normally my focus would be on finding good long opportunities under current market conditions: bottom in place, consolidation, and now the market is moving higher.  But GS is too tempting on the short side.   During the day I actively trade one stock at a time but will hold secondary positions in stocks that are trending in a particular direction.  GS will not be my primary stock until it breaks 87.30, the low from the prior two trading days.  But I will enter a short position if it fails to trade above the 92 level or breaks the 90 support today.  I will open a very small position initially.  If GS moves down quickly through 87.30 then I will add to my core position.Initial downside target of 85.  Then 82.  Next stop after that 75….

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