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Tuesday, February 9, 2010

GS in Bearish Digestion

By Mike Paulenoff



All of the action in Goldman Sachs (NYSE: GS) off of the Jan 29 low at 147.81 has the right look of a sideways bearish digestion area that is developing below multi-month breakdown support at 160, which when completed should resolve itself in a new downleg that projects to 145 at a minimum but has an overshoot target at 140-138. My work argues that strength in GS (if any materializes) into the 157-159 area will be used to exit long positions and/or to put into place protective option positions ahead of the anticipated decline.

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