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4GS trade ideas

Taking a Short at Goldman SachsHi all, Here's an idea that is about going short a famous bank. 1 Goldman Sachs (GS) has been channeling steadily upwards from May 2012 up to June 2015. This is a significant move where price rises from $100s to just over $210s. Yes, the price action is noisy so, only patience in a long term trend can net you this kind of over 100% return. 2 However, the bulls got exhausted at $210s and we observed a clear Head & Shoulder pattern formed, as marked out. The neckline of 171.50 was broken cleanly on 01 June 2016. The breakout reached as low as $140s, before undergoing the retracement back to $165s recently. This Head & Shoulder breakout signals that the bullish trend in 1 is reversed into a bearish trend. In other words, price will try to trade lower to reach $140 and beyond. 3 Since the trend is bearish, next we look at the RSI (14), as a guide on when to enter short. This is done by matching the price peaks versus corresonding RSI peaks, We observed that the Head of the H&S coincides with a RSI of around 70. The next obvious price peak was around 200, matching a RSI of around 69. This forms a sort of a RSI resistance, which will help to indicate the next possible peak. Currently, we note that RSI has done a V turn close to the RSI resistance, with price forming the next possible peak, just after the $170. In other words, it is likely that 167 is the starting point for the next phase of the bearish move down. 4 Lastly, the price action starting from 22 June 2015 to now, is taking the form of a classic Elliott 5 Wave pattern. This pattern fits well and coincides with the formation of the H & S pattern. It is likely that price will attempt to move in the form of the 5th impluse wave, to complete this Elliott 5 Wave pattern. Projection: Given the observations made, we project that the next phase of bearish move has already started with the aim of taking price to $140 and lower. Short Entry Condition: Anytime from now, at a price no cheaper than 167.00. Stop Loss: Above 167.00. If price moves beyond this point, it will prove our theory that 167 is the latest peak wrong and therefore remove the basis for going short. Taking Profit: This will be left to your decision and according to your risk profile. You can either hold 100% all the way down or taking partial profits. There are 3 places where you can consider taking partial profit along the way. TP1: 150 is basically a point where you can conservatively take a bit of profit, just in case you have something to show for if the price moved back to break even subsequently TP2: 140 is a critical point where price will decide whether to go lower or to form a double bottom pattern and neutralize the H & S pattern. TP3: 128.50 is the holy grail where the breakout follows through all the way. Price may even carry on lower due to the general bearish drift of the trend. Time Limit: All short positions should be closed by 01 Aug 2016 . Summary: A Head & Shoulder pattern, along with a possible Elliott 5 wave pattern, plus a RSI resistance indicates that GS is starting up a bearish move towards 140 and below. Have a Profitable Day~! -BreakOutArtist
NYSE:GSShort
by BreakOutArtist
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