close icon

Goldman Sachs to Find Elliott Wave Inspiration

A year ago, in March 2018, Goldman Sachs stock climbed to an all time high of over $275 per share. Unfortunately for the trend-followers, the rest of the year was nothing short of disastrous. GS dipped below $152 in December before closing the year at $167.05 for a total annual loss of 35.2%.

The stock finished at $188.96 last week after the bulls’ ambitions were rejected by the resistance near $206. Goldman Sachs is a financially strong and very profitable company, but that did not prevent the collapse in its stock price last year. Apparently, the fundamentals don’t tell the whole picture.

In order to find out what the recovery from $152 really means we need to examine its Elliott Wave structure. Take a look at it on the hourly chart below.

GS stock - Goldman Sachs Elliott Wave forecast

The sharp recovery from $151.70 to $203.29 can be seen as a five-wave impulse in wave (1/A), labeled 1-2-3-4-5. The Elliott Wave theory states that a three-wave correction in the opposite direction follows every impulse. In Goldman’s case, wave (2/B) looks like an A-B-C expanding flat retracement.

Waves A and B are simple a-b-c zigzags, while wave C is still in progress. If this count is correct, once wave C completes the 5-3 wave cycle the trend can be expected to resume in the direction of the impulsive sequence. Targets above $210 a share make sense in the mid-term, unless the price drops to a new low below $152.

In addition, traditional valuation ratios such as P/B and P/E also suggest Goldman Sachs is currently undervalued. When technical and fundamental methods both point in the same direction, it’s a risk worth taking.

Did you like this analysis? Our Elliott Wave Video Course can teach you how to uncover the patterns yourself!



Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

Privacy policy
You may also like:

Can Facebook ‘s Antitrust Concerns Fulfill this Setup?

This article was originally published on June 13th, 2019.  It was updated on August 7th, 2019. Facebook ‘s privacy policies are under the microscope once again. Personal e-mails uncovered during an FTC investigation reveal Mark Zuckerberg knew of the company’s problematic privacy practices. Escalating antitrust concerns are not helping the bulls’ cause, either. Facebook stock still hasn’t been able to fully…

Read More »

Apple Stock is Crashing. How Low Can It Go This Time?

The market didn’t even give Apple stock time to fully recovery from its 2018 collapse. The shares are down by over 12.6% in just four trading days after trade war and antitrust fears spooked investors. One of the best investment strategies is all about buying high quality companies when their stock price is down. Apple…

Read More »

Pandora ‘s Jewelry Hasn’t Lost Its Shine

According to Pandora A/S’ 2017 annual report, the Copenhagen-based company is the “leader in the affordable jewelry segment and the largest producer of jewelry worldwide in terms of pieces crafted.” That leading position paired with double digit average earnings growth in recent years convinced many investors the company was a one-way ticket to riches. So, they…

Read More »

Brookfield Partners and the Risk Climb in Tandem

Brookfield Infrastructure Partners L.P. operates cash flow-generative assets in the fields of transportation, energy, utilities and communications. The company went public in January 2008, just in time for the Financial Crisis. By March 2009, the stock was down over 67% from its IPO price to as low as $4.77. Over 10 years later today, BIP…

Read More »

MSCI Stock – Great Business, but a Bad Investment

MSCI stock was barely holding above $11 a share in November 2008. Earlier this month it reached an all-time high of $247.57. This 2140% return in less than 11 years, not counting the dividends, makes MSCI one of this bull market’s best performers. Anyone who had the insight to buy MSCI stock during the past…

Read More »

iRobot Stock Can Fall Much Lower This Time

iRobot Corporation really does manufacture robots, but don’t picture them anything like in an Isaac Asimov book. Founded in 1990, the company makes robot vacuum cleaners, mops and pool cleaners. It has a market cap of roughly $2.5 billion, down from ~$3.8B in March. Since the bottom of the Financial Crisis in 2009, iRobot stock…

Read More »

ROKU Is the Very Definition of a Bubble Stock

Roku Inc. is a TV streaming platform operator with over 27 million active accounts as of the end of 2018. The company held it IPO in September 2017 and is approaching its second birthday as a public company. Unfortunately, Roku has been a money-losing company for years. Yet, it has a market cap of over…

Read More »

More analyses