Options Trading News

May 30, 2012  Wed 10:46 AM CT

Goldman Sachs is selling off with the rest of the market today, and technical signs may indicate more pressure to come.

The 5- and 10-day moving averages are negative to each other (yellow and purple lines on the six-month chart below) and looming directly above the investment bank's stock in midday trading. That level has been resistance all session.

In addition, the 50-day average is below the 100-day (orange and red lines) in another negative divergence. These technical indicators leave the 52-week low of $84.27 as a reasonable downside expectation.

GS is down 2.6 percent to $95.32 in midday trading.


(Chart courtesy of tradeMONSTER)
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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