Keep an eye on Goldman Sachs at critical point in its charts

Goldman Sachs' stock has been slowing down as it ran into overhead resistance approaching the consolidation levels of last year as well as getting closer to its declining 200-day moving average. Now the stock is sitting about its 50-day moving average, after having weakened off from what can be a "bearish flag" pattern. I don't want to say it's guaranteed to drop under the lower trendline I've marked onto the daily chart, as it remains possible for it to move higher and test the 200-day moving average. But I'm concerned that this chart pattern, together with the indicators looking weak (check out the combination I encircled on the daily and explained at the trading education blogspot (link shown in welcome paragraphs to the right)), signal that investors and traders should keep a close eye on where GS moves from here.


On the weekly chart, I included the parabolic SAR indicator. It isn't one of my favorites for signaling turns, but it can be helpful for trend confirmation. A move down by GS could turn this indicator negative too.

The indicators on the Goldman Sachs' monthly chart are more in the negative side still, along with the daily chart tilting negative. Only the weekly chart had its indicators looking somewhat more positive (well, at least not that negative, given the move up of recent weeks). So one way to look at this is, which will give way? Will the chart get stronger and bring the monthly more positive, or will it weaken off and, between the daily and monthly charts, the weekly chart also turn more negative-looking again?

It also concerns me that Goldman Sachs poked under a shallow line I marked from about ten years ago, on this monthly chart. It's possible that a decline might only re-rest this line, and not go to new lows; but I wouldn't count on that, from a chart perspective. Now, I'm remarking on all this because I happened to notice this chart today, and I know that some analysts have "jokingly" called GS the "most important stock in the world" (it's repeated in some of the banter at Minyanville from time to time). Given GS' current status, moreover, it's probably a good barometer for the financial industry and therefore the broader indices too. So whether or not you're invested in or trading Goldman Sachs, it's worth keeping an eye on this.

When you look back again at the daily chart, you'll see that the trendlines I marked can be used to gauge whether GS remains bullish - staying above the uptrend channel, and breaking above the lighter-color shallow down-trending line I marked. If bullish, then the 200-day moving average is an obvious target. However, if my pessimistic instinct proves correct, then the stock will break under the uptrending channel line on the daily, and then we'll see whether or not it gets other support as mentioned, or makes fresh lows.