Charts of the Day — Goldman Sachs and Bank of Montreal

One of the analysts at Weiss asked my opinion of Goldman Sachs (GS: 177.90 +0.45 +0.25%).  He thought it might present a trading opportunity because it’s been the whipping boy for the Obama administration in the past week.  We agree that Obama is (so far) all talk and no action, and the analyst thought Goldman Sachs could rally once the State of the Union speech is out of the way tonight. 

I told him I did not like Goldman Sachs at this time.  Here’s a daily chart showing how Goldman Sachs is breaking down …

And a weekly chart doesn’t look any better.  I think GS could pull back to 137 … 120 … or 102.

But I hate to see anyone go away empty-handed, so I showed him my favorite bank stock for the moment, Bank of Montreal (BMO: 60.04 -0.05 -0.08%) …

It’s a blue-chip international stock. It had what may be a bullish engulfing candlestick yesterday – the bullish engulfing is separated from the bearish candlestick by a doji, but that might be okay.  And fundamentally, it’s a good stock.

Also, Bank of Montreal sports a relatively high dividend yield of over 5%. BMO is very profitable and Wall Street expects earnings to increase 24% in fiscal 2011.

Bank of Montreal is a candidate for Red-Hot Global Small-Caps only if I needed a trading position.  Right now, I am bearish on the markets, and waiting for further consolidation to give us some great buying opportunities.

In Red-Hot Commodity ETFs, we are now on balance short with some select funds.  We were painfully stopped out of some longs, but at least the protective stops prevented the pain from being worse.

I don’t know how long this correction will last — probably not too long. If you’re trading on your own, be very careful.

Related Posts

• Charts for Monday and More (07/06/09)
• 7 Stories and Charts for Tuesday (11/24/09)
• Investor Fear Coldcocks Commodities — 3 Charts (04/20/09)
• 3 Charts for Santa — The Dollar, Oil and Gold (12/21/09)
• Wednesday Charts: Is This Dollar Rally for Real? (08/26/09)