$GS is Way Way Overbought
I will be looking into short $GS sometime this week or next week for a short-term unless it proves it to me that it could turn into a longer term bearish trade. I wouldn’t just short right now as we do not have any kind of retracement sentiment yet. As of now, this thing looks mighty bullish and quiet frankly it could continue to do so. Anything can and will happen in the market but I am proposing high possibility that we are probably looking at some kind short-term retracement here.
This weekly chart downtrend resistance line (as shown above), we are getting very close to that resistance level and last three times, upon hitting that price level, $GS rolled over quiet a bit. And I am not sure as of today that it will roll over but I am thinking that we will have a pull back at minimum. Since this is the weekly chart, we might not see anything happening on the weekly until end of the week.
Looking at my daily oscillators, you can see that we are topping out. Again this does NOT mean that stock HAS to roll over but there are high possibilities that it will retrace. I will be looking for some kind of early reversal signal on candle formations to enter bearish.
Daily and weekly oscillators are showing overbought status. This does not happen often and this is big warning of possible reversal and for sure retracement that is coming in the near future.
This is DMI indicators and $GS does not like to go higher than 55-60 readings on the this indicator and its reading at 55 currently. This is a strength indicator so the graph shows the momentum in the current trend. As you can see it has been soaring showing the potency of the recent (about a month) of bullish rally.
- Weekly chart resistance line getting close
- Oscillators including DMI hitting the ceiling
It’s always tough to play these pull back moves because good entry is very important. It requires intra-day attention and quick decision making to able to pull it off. Also Because $GS is in bullish trend, it will be hard to pin point the possible targets on the downside since it’s going to be a short-term trade that may or may not lead to longer term. I will update more once I get into a position.
Any Day Now (Daily Parabolics SAR)
The red dots (Parabolics SAR) has not yet switched since late December of 2012! Incredible run! But as you can see the Parabolics are getting tighter and tighter and now its just barely grinding with the stock while it continue to squeeze higher. This is where things could get ugly. If it had some sort of pull back back in late January or early February, I do believe trend could continue with some solid higher lows while maintaining its speed and its cycle. But when you see something stretched out like this with all kinds of oscillators and indicators screaming that its freaking overdosed with crack, you know this is a time bomb that could blow up anytime. I wouldn’t chase it.