To The Moon

I have seen many news about markets divided on whether $Goldman Sachs(GS)$ earnings will going to be bad or good.

There seem to be indications that GS is behind many of its peers. But is it really the case? Why not look at how the shares have been trading using Technical Analysis?

Take away any emotions or bias. In this article I will be exploring $Goldman Sachs(GS)$ using these 3 indicators to tell us a story of how I would expect GS to trade today before its earning report scheduled to release on 19 Jul Premarket

GS Earning Data

The EPS forecast for Q2 2023 is much lower than last year same period EPS, and also much lower than last quarter forecast.

I would think the focus to look at is the CEO’s growth strategy, no doubt it is gaining their board approval. But how the market and its share price is reacting to this growth strategy.

I will be using technical analysis to tell me the story of GS.

GS Earnings History

If we look at how their earnings EPS has played out over the last 2 quarters, Q1 did have a good EPS much better than forecast, but its share price did drop by more than 1% (See GS Price Change section).

So do we really need to trade according to how GS earnings perform?

GS Price Change Before/After Earnings

As mentioned above, the EPS beat estimate in Q1 2023 (8.79 vs 8.14), but share price went down more than 1% after earnings announced.

So I think what is important in this earnings call is to look at how the CEO and company is laying out plans for their growth strategy.

I will look out for tangible targets set at each milestone.

GS Investor Sentiment and Holdings

Investor sentiment is rather neutral about GS future and looking at their holdings, there was a reduction of 0.2% in the last 7 days.

The increase over last 30 days is less than 0.1%. This does not bore well for the share price.

I would expect some sell off once the share price went up a bit as investors could be looking at opportunity to take some profits.

Technical Analysis - Relative Strength Index (RSI)

RSI does show a promising momentum now as it is not in overbought or oversold. But will this be the same after earnings release?

If you notice, the RSI is current trending upwards towards the overbought area, if this continue, we could be expecting a sell off.

Technical Analysis - Average Directional Index (ADX)

ADX is below 20 which indicate GS is in a weak trend, but +DI is above -DI and the change just happen recently, this suggest a bullish upward price movement.

So this might mean GS could be moving upwards but it will be weak and have the tendency to even fall into a bearish trend.

Technical Analysis - Parabolic SAR

As seen in ADX, SAR might explain why we are seeing a bullish upwards movement from +DI, GS has just went through a bullish reversal.

It looks like it is trending upwards but the strength is weak. This also resonate with what ADX value is showing (a weak trend - value below 20).

Summary

From what I have gathered I would not plan for any target price for entry or exit. I think it would be better to observe how the earnings call played out.

A weak EPS does not mean the share price will trend downwards, similarly a strong EPS could have the stock experiencing a sell off too.

GS should be moving in a bullish upward movement, but the strength of the trend is weak.

Appreciate if you could share your thoughts in the comment section whether you think GS would trade strongly after its earnings today (19 Jul 2023).

@TigerStars @Daily_Discussion @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.