Trading Goldman Sachs After Q2 Earnings Report

In usual times, banking stocks tend to perform well when interest rates are rising. However, that has not been the case this year with most bank stocks trading lower.   Of the banks that have reported earnings so far this year, most have missed analyst expectations due to banks setting capital aside to deal with expected loan losses if a recession develops.   Goldman Sachs has bucked the earnings trend with a beat on earnings and revenues. Learn how to trade the stock below.  


Stock:
Goldman Sachs Group Inc


Symbol for Invest.MT5 Account:
GS


Date of Idea:
19 July 2022


Time Line:
1 - 6 months


Entry Level:
$314.00


Target Level:
$373.00


Position Size for Invest.MT5 Account:
Max 5%


Risk:
High



The  Invest.MT5 account allows you to buy real stocks and shares from 15 of the largest stock exchanges in the world.


Source: TradingView
All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a demo account  first to build your knowledge before investing.  Why Trade Goldman Sachs Stock? In Goldman Sachs’s most recent earnings report published on 18 July, the bank posted profit and revenue that beat analyst estimates. Earnings per share came in at $7.73 vs an expected $6.58 while revenue came in at $11.86 billion vs an expected $10.86 billion.   While second-quarter profits fell in its investment banking division – a slow down seen industry-wide – the bank’s fixed income operation generated $3.61 billion in revenue due to “significantly higher” trading activity in currencies, commodities and interest rates.   The trends experienced in Goldman’s report have also been highlighted in other banks’ earnings reports. For example, many mergers and IPOs have been shelved due to the current economic environment causing a slowdown in its deal-making divisions.   However, Goldman is considered to be a well-diversified bank so losses in one division have been offset by profits in another division.   Data from the 13F filing report of 203 hedge funds submitted to the Securities & Exchange Commission (SEC) shows that hedge funds increased their positions by 931.8k shares in the last quarter.   Source: TipRanks , 18 July 2022  While there are some positive takeaways from the earnings report most banks have struggled this year. Goldman shares are down more than 23% on the year. If the US can avoid a recession, then higher interest rates may help to boost margins over the next few quarters.   However, many analysts point to the fact that there is a high probability chance of a recession if interest rates continue to rise but economic growth does not pick up. In fact, banks such as JP Morgan and Wells Fargo both announced it is setting aside more funds for expected loan losses from consumers and businesses.   Goldman Sachs Stock Forecast - What do t he Analysts Say ?   According to analysts polled by TipRanks for a Goldman Sachs stock forecast in the past 3 months, there are currently 9 buy, 4 holds and 0 sell ratings on the stock. The highest price level for a Goldman Sachs stock forecast is $425.00 with the lowest price target at $325.00.  The average price target for a Goldman Sachs stock forecast is $373.91 which represents more than 20% upside from current levels, at the time of writing.  Source: TipRanks, 18 July 2022   An Example Trading Idea for the Goldman Sachs Stock Price An example trading idea for the Goldman Sachs share price could be as follows:  
Buy the stock on a break above $314.00 to allow for current market volatility. 
Target just below the average analyst price target at $373.00. 
Keep your risk small at a maximum of 5% of your total account.   
Time Line = 1 – 6 months  
If you buy 10 Goldman Sachs shares:  

If target is reached = $590.00 potential profit ($373.00 - $314.00 *10 shares).   


It’s wise to remember that the share price is unlikely to go up in a straight line and it may even go much further down before it rises, especially considering the recent sell-off in global stock markets.   Therefore, be sure to exercise good risk management which is one of the most important aspects of trading successfully. You should always know how much you could potentially lose on a trade and the risks involved.   Another factor to consider is the commission which can eat into your profits. With the Admirals Invest.MT5 account you can buy US stocks from $0.02 per share. This means buying 10 shares in Goldman Sachs stock would result in a commission of $0.20 ($0.02 * 10 shares).   There is a low minimum transaction fee of $1. So, the example trading idea above would result in a commission of just $1 overall!  How to Buy Goldman Sachs Stock in 4 Steps    With Admirals, you can buy shares in companies like Goldman Sachs with a low commission of just $0.02 per share and a low minimum commission of just $1 on US stocks. 
Open an account  with Admirals to access the Trader’s Room.   
Click on Trade on one of your live or demo accounts to open the web platform.   
Search for your stock at the bottom of the Market Watch window and drag the symbol onto the chart.   
Use the one-click trading feature, or right-click and open a trading ticket to input your trade size, stop loss and take profit level.   
Source:  Admirals MetaTrader 5 Web . Past performance is not a reliable indicator of future results, or future performance.  Click on the banner below to buy Goldman Sachs stock today! ▼▼▼  Do You See the Goldman Sachs Stock Price Moving Differently?      Remember that all analytics and trading ideas are based on the personal view and experience of the author.   If you believe there is a higher chance Goldman Sachs's share price will move lower, then you can also trade short  from a CFD (Contracts for Difference) trading account which Admirals also provide.   The  Trade.MT5  and  Trade.MT4  account allows you to speculate on the price direction of stocks and shares using CFDs.   This means you can trade long and short to potentially profit from rising and falling stock prices. Learn more about CFDs in this How to Trade CFDs article.  INFORMATION ABOUT ANALYTICAL MATERIALS:    The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admirals’ investment firms operating under the Admirals trademark (hereinafter “Admirals”) Before making any investment decisions please pay close attention to the following:   
This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.    
Any investment decision is made by each client alone whereas Admirals shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content. 
With a view to protecting the interests of our clients and the objectivity of the Analysis, Admirals has established relevant internal procedures for the prevention and management of conflicts of interest. 
The Analysis is prepared by an independent analyst, Jitanchandra Solanki (analyst), (hereinafter “Author”) based on their personal estimations.    

Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admirals does not guarantee the accuracy or completeness of any information contained within the Analysis.    
Any kind of past or modelled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admirals for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed. 
Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the  risks involved. 

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