Goldman's Stock Seen Falling 33% Off High

Shares of Goldman Sachs Group Inc. (GS) have fallen 25% from their March highs, a precipitous decline for a stalwart of the banking industry. That amounts to tens of billions of dollars in lost market value for investors in one of Wall Street's venerable banks. Now, things may get worse as the bad news mounts for Goldman. Technical analysis suggests that the stock may drop 12% further from its current price, which would push GS down 33% off its all-time high. Making matters worse, analysts have slashed their fourth quarter earnings and revenue estimates over the past month. Also weighing heavily on the stock is news that the Malaysian finance minister is demanding that Goldman repay fees paid to the bank for the setup of an investment fund. The chart shows the stock is approaching a technical support level at $200. Should the stock drop below that level of support it is likely to fall to the next support region at $183.50. The relative strength index (RSI) has been steadily trending lower since August after peaking near overbought levels. Additionally, the RSI has been in a long-term downtrend since late 2016. The RSI failed to make a new high in early 2018 despite the stock reaching an all-time high in March. It is a bearish divergence and suggests momentum is leaving the stock.