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"As the readers of this blog know, I often look at charts by stripping out the price candles and only looking at the moving averages. I find that this type of analysis helps you focus on the dominate trend. By knowing which way a stock is trending, you can increase your edge in trading by picking trades in the direction of the trend.
GS is clearly in a daily down trend and that suggests to me that if the market is going to fail at the 1340 S&P level, GS should be at the top of your short list.
Let's look at the updated GS chart including the price candles …
Goldman Sachs (Daily):
What a piece of doggy poop … some institution(s) are pounding this thing and want out. Value buyers are showing no sign of being able to swing the balance of power back yet. That will happen but it is best to not try and guess but to wait for the market to tell you it has happened or ideally is in the process of happening.
Earlier this month, I had a nice profit from Aeropostale. I covered, and it spent the next couple of weeks (circled below) noodling around. I re-shorted it yesterday for a couple of reasons;
(1) It had the makings of a huge, huge head and shoulders pattern;
(2) More importantly – and this is very "un-chartish" of me – it was just about the only maker/seller of clothes that wasn't soaring to the moon. Everything else – be it ANF, LTD, LULU – seemed to just lurch skyward. But Aeropostale must be out of favor amongst consumers, so I figured that anything this weak in the face of super-strong industry brethren must have real troubles.
I have, just as I did earlier this month, covered to take profits. But I daresay this stock could be in the single digits within a year's time.