Why Traders Should Dig For Goldman Sachs Stock This Month

view original post

The shares of Goldman Sachs (GS) are up 0.4% at $387.51 this afternoon, staging a recent bounce off the 140-day moving average and $370 region – the latter of which has served as a floor for GS since mid-July. With a 92% year-over-year lead under its belt, there’s reason to believe GS could climb even higher this month, based on historically favorable seasonality.

Specifically, Goldman Sachs stock just landed on Schaeffer’s Senior Quantitative Analyst Rocky White’s list of the 25 stocks with the biggest monthly returns in October during the last 10 years. According to White’s data, GS has enjoyed positive returns after nine of these instances, averaging a 4.7% pop. A similar move from its current perch would put GS just above the $405 mark.

Sentiment surrounding GS is largely optimistic. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), GS sports a 50-day call/put volume ratio of 2.32, which stands higher than 80% of readings from the past year. This means long calls are being picked up at a quicker-than-usual clip.

Analysts are also mostly bullish, with 10 of the 14 in coverage calling GS a “strong buy.” Plus, the 12-month consensus price target of $430.12 is a 10.6% premium to current levels.