(CNBC, December 18, 2012)
Considering shares of Goldman Sachs are about 40% higher over the past 6 months, can the stock possibly have more room to run?
With a resolution to the fiscal cliff becoming more likely, conventional wisdomwould suggest the answer is yes.
After all, Europe’s financial woes don’t seem to be as bad as feared. And China’s slowdown isn’t as bad as expected.
But is it all baked in – already?
Although Jim Cramer picks stocks based on fundamentals, he also believes there’s merit to examining charts and extrapolating patterns– something called technical analysis.
The following technical analysis was provided by Bob Lang, a Cramer colleague at RealMoney.com.
Although Goldman has had a decent run over the past 6 months, patterns in the charts suggest to Lang that gains are far from over. Here’s why:
1. W-Pattern. Goldman has made what Lang described as a great looking W bottoming pattern. It’s called a W pattern because it looks like the letter W—and this is one of the most reliably bullish formations out there. In short, after a stock makes a W pattern, it tends to move up very sharply.
2. Breaking Out. Recently shares pierced $125 a strong level of resistance or ceiling. If the stock can stay above $125