Stock Traders Daily Initiates Goldman Sachs Group Inc (NYSE:GS) with a Sell Rating

Stock Traders Daily has initiated shares of Goldman Sachs Group Inc (NYSE:GS) with a Sell Rating.  We recognize GS as best in class, we believe the company will be able to weather any storm the market throws its way, but we also see significant economic risks and risks to earnings growth for GS going forward accordingly and with that share price declines can be significant.

In addition, our macroeconomic model, The Investment Rate, tells us that the US economy is in the third major down period in US History, akin to the Great Depression and Stagflation, and the only reason we are not already in a depression is stimulus.  Now that FOMC stimulus is over and the 3-year cycle is behind us the risk of a reversion to the mean is real.

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That creates a liquidity crisis in terms on new money, as we have already defined in our institutional research, and when that is coupled with the more immediate liquidity problems presented by all time lows in the cash - margin debt ratios on the NYSE significant downside pressure can manifest in the stock market as this year continues.

Earnings Growth for GS is expected to be better 2 years from now if the economy holds, but we don't think it will.  Although the PE does not look rich for GS, it does when you compare that to the dismal EPS growth rate expected this year.  GS is a sell in our opinion.

Technical Summary

Term →Near Mid Long
Bias Strong Neutral Neutral
P1 149.82 126.42 131.61
P2 152.77 142.92 152.46
P3 154.67 157.63 172.16

Long Term Trading Plans for GS

March 15, 2016, 10:43 am ET

The technical Summary and associated Trading Plans for GS listed below will help you make important timing decisions for your trades. This data is based on our proprietary analysis for GS. In addition we offer Market Timing Models and Stock Filters in the links above which may increase the proficiency of the decisions you make.

GS - (Long) Support Plan

Buy over 152.46 target 172.16 stop loss @ 152.2.
The technical summary data tells us to buy GS near 152.46 with an upside target of 172.16. This data also tells us to set a stop loss @ 152.2 to protect against excessive loss in case the stock begins to move against the trade. 152.46 is the first level of support below 153.49 , and by rule, any test of support is a buy signal. In this case, support 152.46 is being tested, a buy signal would exist.

GS - (Short) Resistance Plan

Short under 172.16 target 152.46 stop loss @ 172.42
The technical summary data is suggesting a short of GS as it gets near 172.16 with a downside target of 152.46. We should have a stop loss in place at 172.42 though. 172.16 is the first level of resistance above 153.49, and by rule, any test of resistance is a short signal. In this case, if resistance 172.16 is being tested, a short signal would exist.

GS Long Term Analysis

GS EPS Analysis

GS Dividend Chart

GS Revenue chart

GS Growth rate - Quarterly

GS Growth rate - Yearly

GS PE chart

GS PEG chart