Blue Chip’s Pullback is Too Good to Pass Up

by Sam Collins | February 13, 2014 1:48 am

Goldman Sachs (GS[1]) — This Dow 30 component is one of the world’s leading investment banking and securities firms. It earned $15.46 per share in 2013, and the consensus estimate is $15.75 in 2014 and $17.03 in 2015. S&P’s 12-month price target is $195 and is based on a multiple of 12.5X their 2014 EPS estimate of $15.65.

I last recommended GS on Dec. 3[2], at about $169, noting that it broke to new highs on a day when most stocks took a breather. I set a trading target of $180. 

Not only did GS break out, but on Jan. 6, it exceeded my trading target, topping out above $181. Profit-taking and the January sell-off drove the stock to just under its 200-day moving average. 

Now at about $164, GS appears to have bottomed just above its intermediate trendline, and in the last two days, it closed above its 200-day moving average. Its MACD indicator is close to issuing a buy signal. 

Buy GS at the market with a trading target of $175. Investors should consider this premier blue chip as a long-term purchase.

GS Stock
Click to Enlarge

Chart Key[3]

  1. GS:
  2. on Dec. 3:
  3. [Image]:

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