GS Goldman Sachs Daily Chart H&S Downward Channel Gaps

GS Goldman Sachs ahead of earnings tomorrow. Lots going on technically. The blue lines show an H&S in play, in fact, the neckline at 155 was broken today. A 175 head and 155 neck targets 135 which is sturdy horizontal support, but this would not come tomorrow but would play out over the coming weeks and months.

To step back, the red line negative divergence forecasted the spank down in January perfectly. Since the January top, GS has a steady downward channel in place with lower lows and lower highs. The green circles highlight open gaps that will need filled at some point. Over the last month, price today dropped under the March low but traders could not stop themselves from buying. Today's candle finished above the half way mark indicating that GS bulls won the day today. Bulls must be worried they will miss the earnings fun tomorrow. This chart, however, shows no compelling reason to be long.

Over the last month the indicators are flat providing no significant positive divergence bounce. Price is under the 20 MA which is under the 50 MA--bearish. On the weekly chart, price is under all the MA's; 20, 50 and 200--bearish. The weekly chart, as well as this daily chart, shows a preference for price to move out sideways from here. The pink lines bracket a range of 150-160 moving forward. This range would satisfy that large gap fill at 157-160 and also test the October 2010 support at 150.

Keeping the sideways theme thru the earnings release tomorrow, the 150 to 155 range is reasonable for the days ahead, then 150 to 160 for the weeks and months ahead, ultimately satisfying the H&S target of 135, probably as Santa comes to town. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your finanical advisor before making any investment decision.