The banks kicked off earnings season on Friday, because the country’s largest investment banks began reporting their fourth-quarter results.
We went over essentially the most notable setups, knowing full well that we’d also need to listen to from Goldman Sachs (GS) – Get Free Report and Morgan Stanley (MS) – Get Free Report, which each reported on Tuesday before the open.
For its part, Goldman Sachs delivered a top- and bottom-line miss. The shares opened about 2.5% lower and are actually down about 5%.
Morgan Stanley delivered in-line earnings results, while revenue of $12.7 billion got here in $100 million ahead of consensus estimates. In response to those results, the shares eventually check were up greater than 6% and the stock is hitting its highest levels since February.
Trading Goldman Sachs on Earnings
Goldman Sachs stock put in a pleasant double-bottom over the summer, however within the fourth quarter. Every time, the shares pulled back, Goldman Sachs made a higher low and located a approach to push to latest recent highs.
Today’s post-earnings response is mild, particularly after a six-day 9.8% rally. Ideally, support near the 10-day and 50-day moving averages would have held for bulls.
To date, though, it’s not, so $350 and the 21-day are the following level of support.
On the long side, let’s see if Goldman Sachs stock can hold $350, then reclaim the 10-day and 50-day moving averages. If it might, bulls will need to see it regain the 61.8% near $370, then rotate over last week’s high near $375. Above $378 puts $390 in play.
If $350 fails as support, it opens the door back all the way down to prior range support around $340, while a detailed below this level can be quite destructive for the charts.
Trading Morgan Stanley on Earnings
As for Morgan Stanley stock, the shares are trading significantly better this morning. The stock is clearing the fourth-quarter and December high, in addition to the 61.8% retracement from the 52-week low as much as the 52-week high.
Each measures come into play at just over $95.
From here, $100 is the following logical upside goal, with the 78.6% only barely beyond that figure at $101.76. Above that puts $105 resistance in play, then the highs near $110.
On the downside, it’s easy: Bulls need to see Morgan Stanley stock hold $95.