Right now, it's the second-half of July, which means a few things are certain: 1) It's incredibly, fry-an-egg-on-the-pavement hot outside, and 2) It's time to be bullish about Goldman Sachs (GS).
Spotting and analyzing trends and patterns in the past is an age-old means of predicting the future. It may not be particularly exact or full of detail, but can often give a solid, legitimate expectation of what will happen. Over time, some things can become clearly cyclicall, and I believe this to be true of the stock price of Goldman Sachs. GS hit a new 52-week low of $125.50 on Tuesday (July 19th), but has since recovered to $134.70 at the time of this post. The stock price has struggled throughout the month of July, part of a longer decline that has been ongoing since April.
This "summer decline" is nothing new to GS, however, and has been a part of the stock's life cycle for the past several years. The part of this trend that I want to focus on, however, is the recovery.
As this graph from CNBC.com shows that, aside from 2008 (the financial crisis obviously creates aberrations), July typically is the beginning of a substantial period of growth for the stock price. When the period of growth will end and the price will peak is difficult to determine, but then again this isn't an in-depth analysis. This is simply spotting the fact that the cyclical nature of GS suggests that the stock price will increase over the next several months. I am confident that history will repeat itself, and it should create value for anyone who takes advantage of it.