Trade Ideas Newsletter 04/21/2017

GS is positioned for a contrarian breakdown

Based on the above analysis in GS, traders should verify that their portfolio can handle increased risk from an additional position. Also ensure that GS improves diversification in your current portfolio. Lastly, clever traders check how a new position matches up with not just their account, but the previaling market action as well. For example, take a look at the S&P 500. Is it moving to the upside or downside? Has it recently broken a key ceiling or floor? Be sure to line up your trading actions on GS with the trend in the overall market.

CHART

Right now the proprietary sentiment levels, calculated by Traders For Wealth, indicate an suprisingly positive bias toward GS. However, the price action in GS has been moving down contrary to the sentiment. This could be a strong sign of an impending contrarian breakdown. Traders should view this as a bearish position and make sure it is confirmed by overall market action, and in line with their current portfolio.

Goldman Sachs Group (GS)

The Goldman Sachs Group, Inc. is an investment banking, securities and investment management company that provides a range of financial services to corporations, financial institutions, governments and individuals. The Company operates in four business segments: Investment Banking, Institutional Client Services, Investing & Lending, and Investment Management. The Investment Banking segment consists of financial advisory and underwriting. The Institutional Client Services segment makes markets and facilitates client transactions in fixed income, equity, currency and commodity products. The investing and lending activities, which are typically longer-term, include its investing and relationship lending activities across various asset classes, primarily debt securities and loans, public and private equity securities, infrastructure and real estate. The Investment Management segment provides investment and wealth advisory services. As of December 2016, it had offices in over 30 countries.