GS Update and Trade Ideas

GS has been one of more popular stocks and one of the stronger looking of the Financials, I see two probable trades here, one is probably good right about now and that would be an options call.

However, this shorter term bullish position is like a means to an end and that is a larger GS short. GS has been in good shape as far as 3C goes and it's been hard to call out a short trade or put because of that, but that is changing and I think GS will gain some upside and in doing so, set up a low risk, high probability short position.

Here's the update, when I get the larger market update out, I think this too will make sense, at least the longer term short position, but because of the popularity of GS and the  shorter term long/call position, I needed to get this out now.

 GS 1 min intraday going from a slight negative to a leading  positive divergence today. To me this looks like it will fire off sooner than later which also means the base in GS won't be very big, therefore won't support a very large move, but it can be significant for the short period of time and in fact I think it needs to be significant, I think that's the idea, a sentiment change.

However because of the shorter term nature of the position, I'd use calls personally to get some leverage on the profit potential, this also fits very well with the market update and stocks making a move before the F_O_M_C policy announcement Wednesday.

 GS 2 min leading positive divergence today alone.

 GS 5 min leading negative sending it lower and a larger relative positive (although a weaker divergence than a leading divergence, the larger size says something for the position).


Now the longer, more important charts and why I'd want to short GS in to price strength....

 GS 10 min leading negative and very significant. The white area is about where I think GS would need to break out above to shift sentiment, that's also a key area to set up a head fake entry (short) in GS that is low risk and high probability.

I'd set some price alerts.

The larger, more powerful GS 15 min chart shows the initial base to the left, an in line status at the green arrow and a recent leading negative divergence, as I said, GS has not been an attractive short lately, that's starting to change.

The long term (Big picture) 2 hour chart shows the initial negative and now a much faster developing, much more serious leading negative divergence, this tells me there has been VERY strong and recent distribution by institutional money (remember distribution can show up as either selling or short selling as both re selling).

GS intraday has that flat range that we so often see with accumulation and distribution, it looks like today we are seeing short term accumulation to make that move that brings the GS short to us.

I may enter a GS call if I have time and it makes sense, but the stronger trade is letting the short set up come to you.