March 29, 2024

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Goldman Sachs Stock Triggers Buy Signal After Market’s Perfect Storm

3 min read

IBD Stock Analysis

  • Goldman Sachs cleared a buy point of 342.98 intraday.
  • Shares also bounced above their 50-day line, another buy signal.
  • The stock will soon form a flat base with a 356.95 entry.

Composite Rating

Industry Group Ranking

Emerging Pattern

Three Weeks Tight

* Not real-time data. All data shown was captured at
12:46PM EDT on
04/14/2021.

Goldman Sachs (GS) is the IBD Stock Of The Day, as the investment bank flashes bullish indicators after a blowout earnings report. Goldman Sachs stock is also forming a new base.




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Market Bonanza Lifts Earnings

EPS soared about 500% to $18.60, nearly doubling Wall Street forecasts. Revenue shot up 102.5% to $17.7 billion, easily beating views for $11.5 billion.

The quarter coincided with market trends that fed directly into Goldman Sachs’ wheelhouse.

The Reddit-fueled short squeeze drove big swings in stocks and equity-trading desks. The spike in Treasury yields added to the market volatility, further lifting trades. And the continued boom in new stock listings via special purpose acquisition company mergers aided the investment bank’s underwriting business.

Goldman Sachs’ investment banking revenue surged 73% to a record high $3.77 billion. Fixed-income trading revenue jumped 31% to $3.89 billion, and equities trading revenue surged 68% to $3.69 billion.

Asset management revenue shot up $4.61 billion compared with a negative $96 million a year ago. Wealth management revenue climbed 16% to $1.74 billion. Provision for credit losses was a net benefit of $70 million, vs. net provisions of $937 million a year ago.

CFRA Research analyst Kenneth Leon reiterated strong buy and 395 price target on Goldman Sachs stock but said the bank is “executing on all cylinders.”

He added that capital markets will remain very active in a low rate, risk-on environment from corporate issuers, mergers and acquisitions, and investors.

“We see the next major catalyst coming from buybacks and dividend hikes when the Fed’s stress test results are released by July 1,” Leon said in a note to clients.


IBD Live: A New Tool For Daily Stock Market Analysis


Goldman Sachs Stock, Bank Stocks

Shares pared earlier gains and closed up 2.3% at 335.35 on the stock market today, after rising as high as 344.37. Intraday, Goldman Sachs stock cleared a 342.98 buy point from a three-weeks-tight pattern, according to MarketSmith chart analysis.

Despite pulling back below the three-weeks-tight entry, the stock is also rebounded bullishly from its 50-day line on a daily chart as well as its 10-week line, representing a separate buy signal.

And after this week, Goldman Sachs stock will form a flat base with a 356.95 entry.

Meanwhile, the relative strength line is trending upward. Shares have an RS Rating of 75 out of a possible 99 with an EPS Rating of 89.

Wells Fargo (WFC), which also reported better-than-expected earnings on Wednesday, is flashing signals that are similar to Goldman Sachs stock.

Shares rebounded from the 10-week line and rose 5.5% to 41.99 Wednesday to clear a four-weeks-tight pattern with a buy point of 41.64. The Leaderboard stock will also form a flat base soon.

Goldman’s investment banking rival Morgan Stanley (MS) reports Friday. Bank of America (BAC), Citigroup (C) each report Q1 results on Thursday.

Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.

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