FTSE 100
Goldman Sachs results are out, and as markets somewhat expected, they were underwhelming. Goldman Sachs earnings per share came in at $3.11, with $8.74 billion net revenue declared for the first quarter of 2020. Net revenues were unchanged from the same period measured in 2019. However, the company was able to grow its net revenues in equity trading by 22%. Consumer deposits increased to $72billion, a 25% jump from the previous numbers.
In providing forward guidance, the company noted that there would be financial disruptions from the coronavirus pandemic and that the company could see a negative impact on its liquidity and business conditions. The company also indicated that it would deploy more capital to its market-making division given the decline in the valuations of the commodity, stock and fixed-income markets. The company also stated in its statement that it expected a continuation of draws in lines of credit and that investment banking activities could decline.
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Goldman Sachs share price is presently 4.82% lower as markets opened with a sharp downside gap. In the long term, Goldman Sachs share price continues to push up from Q1 2020 lows even as the stock shows two descending price peaks from 2018 till date.
In the short-term, the technical picture seen is that of a reversal from the “W” pattern on the daily chart is on its way. The gap has brought the stock directly on the support zone, which has 171.71 and 168.06 as the price ceiling and floor, respectively. A bounce from this support zone would be an attempt to close this gap, with the price move targeting the upside targets at 180.68 and possibly the 23 May 2019 low of 189.33, which functions in role reversal. Only a break to the upside from 189.33 will invalidate the evolving “W” pattern, and this would target the resistance levels at 195.97 and 199.63.
On the flip side, a breakdown of the support zone confirms the price reversal from point D on the pattern. It opens the door for the price to continue aiming for the lower barrier of the vast channel seen on the weekly chart that connects the highs of 12 March 2018 and 21 January 2020, as well as the lows of 31 December 2018 and 30 March 2020. Price would need to take out 160.74 and 151.44 to be able to achieve this run.