From Nov 4, 2024 - GS was 518, called 900 - Today 925! [From Medium.com]

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Goldman Sachs (GS) has surged with impressive momentum, experiencing a 15% high-volume rally in the wake of Trump’s election win, which appears to have triggered the start of a Wave 3 of 3 on the decade-long Elliott Wave chart. This move could signal the beginning of a strong long-term uptrend, with a significantly higher price target if the wave structure holds as projected.

Goldman’s long-term Elliott Wave pattern began with an initial Wave 1 that propelled the stock from $130 to $430, reflecting a powerful early phase of bullish sentiment. This was followed by a Wave 2 correction that retraced the rally, bringing the stock back down to $280. Now, after today’s notable rally, it appears that Wave 3 is unfolding, and within it, we may be witnessing the powerful Wave 3 of 3 — often one of the strongest stages of an Elliott Wave cycle, marked by broad participation, high volume, and a general sense of euphoria.

If this is indeed the 3 of 3 wave, then it could continue to lift Goldman Sachs’ stock significantly. According to classic Elliott Wave theory, Wave 3 often reaches 1.618 times the length of Wave 1. With Wave 1 spanning $300 (from $130 to $430), this calculation implies that Wave 3 might extend $485 above the Wave 2 low of $280, setting a target range for Wave 3 at $850 to $900 over the long term. This ambitious target is based on the assumption that the current rally is indeed a 3 of 3 wave within a larger uptrend.

Today’s strong move suggests that Goldman Sachs is gaining momentum amid investor optimism around Trump’s victory. Market participants appear to anticipate a favorable policy environment, potentially including tax reforms, regulatory shifts, and pro-business initiatives. These factors tend to benefit financial giants like Goldman Sachs, which could see increased earnings potential, reduced regulatory burdens, and potentially higher capital inflows.

The high trading volume accompanying today’s rally is another sign that this could be more than a temporary reaction. In a Wave 3 of 3 scenario, high volume is typically seen as an indication of broad buying interest, as investors recognize the beginning of a substantial uptrend.

To gauge the sustainability of this rally, monitoring the Relative Strength Index (RSI) and price action will be critical. While today’s spike has moved the RSI higher, it remains in a moderate range, below the typical overbought threshold of 70, which suggests there is room for additional upside. Should the RSI remain below 70 as Goldman approaches higher targets, this would indicate that the stock still has strength left to continue rallying without triggering cautionary signals.

If Goldman Sachs continues to break key resistance levels with strong volume, it could confirm that this is indeed the expected Wave 3 of 3. Additionally, any retracements should be closely watched, as they could offer clues about potential reversals or further support levels. If the stock holds above the $430 resistance level, it will further validate the long-term bullish wave structure.

Despite the promising setup, there are risks that could impact Goldman’s trajectory. Political uncertainties, economic slowdowns, or adverse policy changes could dampen the rally and prompt a reevaluation of the wave structure. Additionally, if the RSI reaches overbought levels, investors may begin to lock in gains, which could slow the rally and lead to retracements.

Goldman Sachs’ recent surge following Trump’s win suggests that it could be embarking on a powerful Wave 3 of 3 rally, with a target of $850-$900 over the long term. Investors should watch for continued momentum and increased volume as key indicators of strength, as well as monitoring RSI levels to ensure the stock doesn’t overextend in the short term. If this Elliott Wave structure continues to hold, Goldman Sachs could see substantial upside as it rides a powerful long-term uptrend.