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New Calls

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New Puts

Goldman Sachs - GS - cls: 217.08 chg: -6.22 stop: 225.81

Company Description:
Goldman Sachs is a leading global investment banking, securities and investment management firm that provides a wide range of services worldwide to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals. (source: company press release or website)

Why We Like It:
We are usually pretty bullish on Goldman Sachs. The company is an incredible money maker. Yet the momentum has definitely turned in the stock price. Shares have a bearish pattern of lower highs and lower lows, which looks lot like a bearish channel. The last few days have seen GS produce a couple of failed rallies near $225. Today's 2.7% decline was fueled by above average volume and produced a breakdown under short-term support near $220. The catalyst behind today's move was renewed sub-prime loan fears, which many of the big brokerages have exposure to. This is somewhat aggressive since GS has already moved so much today. If the stock bounces look for a failed rally in the $220-225 zone as a new entry point for puts. Our target is the 200-dma but we'll use an exit in the $208.00-206.00 zone for now, which is near the bottom of its channel (see chart).

Suggested Options:
We are suggesting the August puts.

BUY PUT AUG 220 GPY-TD open interest=2614 current ask $8.80
BUY PUT AUG 210 GPY-TB open interest=6546 current ask $4.60

Picked on July 10 at $217.08
Change since picked: 0.00
Earnings Date 09/12/07 (unconfirmed)
Average Daily Volume = 5.9 million
 

New Strangles

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