Goldman Sachs Group Inc. (NYSE: GS) opened at $215.15. So far today the stock has hit a low of $213.54 and a high of $216.87. As of 11:40 this morning, GS is trading at 215.58, up 1.05 (0.5%).After hitting a one year high of 222.75 in February, the stock dropped in the late February market correction, but has been looking to climb again since early March. Jim Cramer (a former Goldman employee) believes that the financial sector is going to thrive, and he recommends GS as a "cheap, high-quality member of the financial group." Recent technical indicators for GS have been bearish but improving slightly, while S&P gives the stock a very positive 5 STARS (out of 5) strong buy rating.
For a bullish hedged play on this stock, I would consider a July bull-put credit spread below the $175 range. GS hasn't been below 175 since October and has shown support around 205 recently. This trade could be risky if earnings from other financial players this week disappoint, but even if this happens, this position could be protected by the strong historical support around 190, combined with the company's 200 day moving average, which is currently just around 185 and rising.
Brent Archer is an options analyst and writer at Investors Observer. Do you have any deadwood in your portfolio? Check out the 18 Warning Signs That Tell You When To Dump A Stock.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about.
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