The Goldman Sachs Group is a global investment banking and securities firm providing a range of services on a worldwide basis, including investment banking, trading and principal investments, and asset management and securities services. For the FY ended 11/00, revenues rose 31% to $33B. Net income rose 13% to $3.07B. Results reflect growth in investment banking and asset management activitiespartially offset by the absence of a $716M tax benefit.

January 24, 2000

The AMEX Securities Broker/Dealer Index (XBD.X) is up over 32% since the end of November and Goldman Sachs has certainly been along for the ride. This move in the brokerage stocks makes sense since the Fed appears likely to slash rates yet another half point, creating a much more stable operating climate. Goldman Sachs makes most of its money from managed accounts. Management fee income grows when the underlying assets grow. For the year 2000, assets under management grew to $294 billion, up 14% from 1999. Goldman Sachs is also a major player in the IPO markets and if the stock market continues to stabilize, we could see a resurgence in this business. Earnings from the major broker/dealers have been strong, highlighted by Merrill Lynch's (NYSE:MER) stellar results announced earlier this week. Goldman Sachs will report their earnings on March 20th. The current trend line creates good support at $111.75. Major overhead resistance is likely to be found at $128.00, which gives us plenty of room to make a nice profit. The MACD offered a brief scare last week, but it appears to have resumed its upward course. OBV is very strong and is currently higher than when the stock was last making new price highs in September. Goldman Sachs is also a viable split candidate due to its lofty stock price. The company does not have any split history.

Picked on January 24th @ $117.88
Change since picked +0.00
Stop Loss @ $111.00

February 6, 2001

Goldman Sach's stock has officially broken below support and is rolling over. This event resulted in the execution of our stop. The next major level of support for GS is its 50-DMA, which closed today just above $100.00. A bounce off this support may bring back some bullishness.

Picked on January 24th @ $117.88
Profit/Loss -6.88 (6%) (Stopped Tuesday @ $111.00)
Best Profit +1.87 (2%)

February 4, 2001

The share price of Goldman Sachs was dragged lower on Friday amid general market profit taking. This was following a jobs report that left traders wondering if the Fed is done cutting interest rates for now. In many ways, the share price of Goldman Sachs is a proxy for the broader market. If the stock and bond markets are rallying or are perceived to start rallying, then the share price of GS begins to go up. A strong market leads to increased IPO, trading and management fee income for Goldman Sachs. GS is stuck in a bit of a sideways technical pattern following a nice recovery from its low of $77.00 at the end of November. A possible entry point early this week would be to pick up the stock if it can bounce off support at $112.00. This support level is provided by the 20-DMA. A resumption of the rally will be verified if GS can break out above resistance of $120.00 on volume above 3 million shares. This could provide another excellent entry point. We are concerned about the down turning MACD, which just issued a sell signal on Thursday. On the plus side, this sell signal was not confirmed by the RSI, which failed to reach overbought levels during the most recent rally.

Picked on January 24th @ $117.88
Change since picked -3.92
Stop Loss @ $111.00