Goldman Sachs stock has generated positive returns for nine of the last 10 years in July
With an excellent first half for Wall Street in the rearview mirror, investors are speculating on potential gains for the second half – and things are looking good. Bank stocks have drawn considerable attention lately as volatile 10-year government bond yields led to a recent sell-off in the sector. However, this pullback can be the perfect opportunity to move on Goldman Sachs Group Inc (NYSE: GS). Though it was down 0.7% most recently, trading at $ 367.22, it is 84.4% ahead of the previous year. Additionally, GS is just a month away from an all-time high of $ 393.26 on June 7th, and there is reason to believe that level may be back within reach soon.
If you dig deeper, Goldman Sachs stock just made it onto Schaeffer’s senior quantitative analyst Rocky White’s list Best performing stocks on the S&P 500 in July, 10 years back. The security has generated positive monthly returns nine out of ten times over this period, with an average increase of 4%. This means that a move of a similar magnitude from its current location would bring GS to nearly $ 382 – which would leave roughly 3% between equity and its aforementioned all-time high.
In the charts, Goldman Sachs shares are making a fourth loss in a row. The last time the stock posted a similar streak of losses, it bounced off the $ 348 mark in mid-June – which coincides with the 80-day moving average – then rose above the $ 380 mark by early July.
A shift in sentiment in the options markets could give Goldman Sachs stock additional momentum. This corresponds to the security’s 50-day put / call volume ratio on the International Securities Exchange (ISE), the Cboe Options Exchange (CBOE) and the NASDAQ OMX PHLX (PHLX), which is in the 74th percentile of its annual range. In other words, long puts are picked up faster than usual.
This is also reflected in Schaeffer’s Put / Call Open Interest Ratio (SOIR) of 1.28, which is over 84% of the values from last year. This means that short term option traders are more put than usual.
In addition, GS premiums are currently a bargain. The security’s 29% Schaeffer’s Volatility Index (SVI) is above 18% of values in its annual range, suggesting that options traders have rarely priced in lower volatility expectations over the past 12 months.