The mood in the American stock market
The pessimism among American stockbrokers is noticeably growing. The latest AAII sentiment survey shows a rapid rise in bears. It is worth noting that the bull camp has hardly changed. Rather, the originally neutral market participants have taken the bearish side.
Although there is often a stock correction in summer, the survey values should not be overweighted. As the recent past has shown, the US stock market is pretty robust. So far, there has been a lot of bad news and events in 2017. Worth mentioning, for example, the many attacks or the unusual US policy. And yet every little course correction was used a little later to start again. Why should it be any different with the next correction?
The AAII survey values
The AAII (American Association of Individual Investors) conducts a monthly sentiment survey, which gave the following result. (03.08.2017)
- Bullish 36.1% (+ 1.7% on the previous month)
- Neutral 31.8 (-9.4% on the previous month)
- Bearish 32.1% (+ 7.8% on the previous month)
The AAII conducts this survey every month. To do this, market participants have to provide a forecast for the next six months.
Image: McClellan oscillator as a summation for NYSE
The McClellan oscillator represents more as 3000 shares of the NYSE. The difference between the rising and falling shares of the market is calculated within the indicator. The result is then smoothed using two different exponential moving averages (EMA). The indicator data are then summed up for the McClellan summation. This allows the trend behavior of the market to be analyzed more precisely.
Technical starting point of the US stock market
In the upper chart you can see the McClellan indicator in the middle. With its wide swings, it shows the trend and the cyclical movements of the market. For comparison, you can see the course of the S & P500 above. Two trend indicators (based on the McClellan oscillator) currently indicate a short signal. It is the dotted line of the Parabolic SAR and the MACD indicator of the McClellan oscillator in the lower part. What looks superficially dramatic is actually just the normal reaction after a sharp climb, look at the price wave marked with a red arrow. It is very dynamic and strong. It is a sign that there should be at least a second upward wave in the same direction, so the summer dance of the bulls should not be over yet. A correction will probably take place in the next few days, which could push the S & P500 to a maximum of 2400 points. The bulls will wake up to this price level at the latest.
The upward trend of the S & P500 is very strong with little volatility. This indicates a stable movement. It will therefore hardly be feasible for the bears to seriously jeopardize the upward trend.
Trend analysis of the largest Dow Jones companies
Short-term = trend analysis of the past 40 daysMid-term = trend analysis of the past 40 weeksLong-term = trend analysis of the past 40 months
Table: Dow Jones Mighty with trend analysis
In the table above, the six largest companies of Dow Jones Industrial are listed based on market capitalization. These companies can be used to estimate the upside potential of the entire US stock market.
The table above shows the trends from three different time levels. The majority of the largest Dow-Jones is in a long mode. In a direct comparison there are 10 long and 3 short evaluations.
The small trend analysis confirms the assumption that the upward trend is very stable. Because trends feed themselves with new buyers, there is little to report for the bears in the stock market. The next short-term correction should be used to start again.
Buy Goldman Sachs stock?
There are companies that you like, and others that you don't. Goldman Sachs is expected to occupy a top position among the unpopular. No other bank in the world is as powerful and influential as Goldman Sachs. With this company, it is almost a matter of course that high-ranking employees go into politics after their banking career. Therefore, there is a close and often friendly connection to politics. It is no wonder that fiscal policy laws are often passed in the Goldman sense. In the past decades, Goldman Sachs has often been able to defend its own interests in a clever and unobtrusive way.
There is practically no lucrative business field where the bank does not play a direct or indirect role. As an investment and securities trading company, Goldman primarily works for large companies and institutional market participants. Goldman also operates a highly speculative proprietary trading department. An area that has often been criticized in the past. The reason lies in machinations on the verge of legality. I do not want to say more on this topic because the range of topics is too large. Everyone should form their own opinion.
Regardless of whether you like the company or not. There is also a listed stock. It is this security that has technically positioned itself.
One of the main causes of the potential price surge is the key rate hike by the US Federal Reserve. Lending money is always the root of the banking industry. However, if the key interest rate is close to zero, there is little opportunity for banks to make money. The period of zero interest rate policy has come to an end a few months ago. Nobody knows exactly how high the key interest rate will be in the future. But Goldman will benefit from any rate hike. A future increase in sales and profits is in the air.
Financials of the companyGoldman Sachs200142015201620172018Revenues395283787837032306083098732248Result before St.117371235787781030K10V11111111man Sachs are US $ 1737123578778153041011111111, With a P / E ratio of 11, the bank is even valued favorably. If the Fed raises the key rate continuously over the next few years, Goldman's sales and profits will rise sharply. The top numbers are estimated for 2017 to 2018. One can assume that a further "leveraged" result could result from further rate hikes. This means that the share price will be too low over the next few years.
Image weekly chart of the Goldman Sachs share
Initial technical situation of the share
The powerful trend channel points steeply upwards. The increase since mid-2016 to the end of February 2017 is very dynamic and contained a lot of trading volume. The price then corrected by approximately 38% to the support level of $ 220. The former resistance became a model for support. The circumstances go very well with a trend continuation. The RSI shows a value around 50. This suggests that market participants will relax. Neither bulls nor bears "tug" on the security. However, because the upward trend is intact, the chances are clearly on the long side.
Don't forget the season. In summer there are always weak phases. However, it is precisely the phases in which the stock could be collected.
Conclusion: Technically, the stock is a "strong buy".
As a trader, you should neither be positive nor negative with the Identify companies with that. If a stock offers a good starting point for a trade, you can seize the opportunity. It doesn't matter whether you agree with the company's philosophy.
Goldman Sachs shares: WKN: 920332 / ISIN: US38141G1040 on German stock exchanges or US symbol GS in the USA
- Target price: $ 296.00
- Interim target: $ 250.00
- Stop loss: $ 204.00
If you want to benefit from the short-term stock recommendation, you can buy the stock directly or work with derivatives. Note that derivatives include leverage and therefore increase the profit and loss potential. In extreme cases, a total loss is even possible.
Stop loss: The stop loss is initially set as an initial stop and has the function of a maximum Loss limitation.
Price target: The price target is the exit point for the forecast market movement.
Interim target: When the intermediate target is reached, the position is in profit. At this point we take a partial profit and we sell 50% of our position. At the same time, the stop loss is adjusted to the personal entry price. This enables us to close our position without loss, even if the market later turns against us.