DailyPlay – Opening Trade (GS) – July 10, 2025

GS Bullish Opening Trade Signal

Investment Rationale

Investment Thesis
Goldman Sachs (GS) approaches its July 16th earnings report with strong momentum, having exceeded consensus expectations in each of the past four quarters.  The firm’s disciplined approach, simplified post-restructuring model, and strong capital markets presence position it well in a gradually improving macro environment.  Additionally, a potential easing in M&A regulation could serve as a tailwind, reducing compliance costs, accelerating deal approvals, and boosting transaction volume. These dynamics would not only enhance advisory fee revenue but also reinforce Goldman’s leadership in M&A advisory. With shares pulling back modestly within a well-established uptrend, current levels may present a tactical opportunity for bullish exposure ahead of the print.

Technical Analysis
GS remains in a strong uptrend, having advanced more than 25% from its May lows. The stock recently pulled back from the $705 level and is now consolidating near its 20-day moving average, which has acted as reliable support during this rally. A bullish continuation pattern may be forming, with $726 marked as the next key resistance. Momentum remains constructive, RSI is holding above 60, and a recent dip in the Commodity Channel Index (CCI) during the broader trend suggests a potential entry point as the indicator begins to recover.

Fundamental Analysis
While Goldman’s forward growth expectations trail the industry average, the firm continues to deliver superior profitability and attractive relative valuation. Its high-margin business mix and operational efficiency support sustained earnings power. Notably, GS trades well below peers on a price-to-book basis, reinforcing its value proposition.

• Price to Book (PB) Ratio: 1.96 vs. Industry Average 4.29
  
• Expected EPS Growth: 9.77% vs. Industry Average 11.9%
  
• Expected Revenue Growth: 3.39% vs. Industry Average 7.01%
  
• Net Margins: 27.38% vs. Industry Average 21.10%

Goldman’s net margins of 27.38% significantly outperform the industry average, underscoring the firm’s operating efficiency and consistent earnings quality.

Options Trade
To position for a continued move higher, consider the GS Aug 22nd 695/755 call spread at a $22.00 debit. This vertical spread risks $2,200 to target a potential $3,800 profit, offering a reward-to-risk ratio of 1.73:1. The 695 strike sits just below current levels and aligns with recent consolidation support, while the 755 strike provides room for upside toward key post-earnings technical levels. With 43 days to expiration, the trade allows for both an earnings-driven move and post-event continuation.

GS – Daily

Trade Details

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish Debit Spread

Details: Buy to Open 1 GS Aug 22 $695/$755 Call Vertical Spreads @ $22.00 Debit per Contract.

Total Risk: This trade has a max risk of $2,200 (1 Contract x $2,200) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $2,200 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that is expected to continue higher over the duration of this trade.

1M/6M Trends: Bullish/Bullish

Relative Strength: 10/10

OptionsPlay Score: 101

Stop Loss: @ $11.00 (50% loss of premium)

View GS Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Wednesday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View GS Trade