Goldman Sachs gapped higher today making it virtually impossible to enter the setup I described recently immediately. The stock closed at $164 on Friday and opened today at $166.31 (noted on the chart above). A small gap at the outset, but the jump was borne out as price went as high as $168.57 intraday before settling back to close at $167.03. Interestingly, the Goldman Sachs call option I suggested in the setup note linked to above went out offered at $4.40 on Friday. It opened today at $5.20 and went as high as $6.75 and before closing at $5.86.
So what now?
I’m less excited about the potential of this play in Goldman Sachs in light of the aggressive move higher today. While the stock might still push higher into the end of the week (and over the coming weeks), I’m less enthused about the play for the moment.
That said, if you get an opportunity to buy a pullback around the $166 level, it’s reasonable, especially if a stop is placed just below Friday’s low ($162.96). In fact, this is actually smaller risk than the risk of the original trade setup.
Goldman Sachs is bellweather for the US stock market. You’ll never go wrong looking for opportunities in the stock.