This is not a trade, I personally believe that goldman is unlikely to go below 87 dollars for several reasons. First of all, this company owns 89.78 dollars per share in CASH with a book value of 142.27. IE if GS is liquidated today, it would be worth 142.27. Obviously this measurement isn't always true or else the the price wouldn't fall below that. The stock rarely go below its cash/share price though. The stock also pays a decent dividend of 1.5% which is not bad compared to citibank or BAC.

In 2008, many companies were actually below their book value for an extended period of time and a ratio of .5 (shareprice/bookvalue)

For a relatively long term holding. I believe two things will happen,

1. Fed will raise interest rate in the long term. IE banks will be more profitable and make more money.

2. Goldman sachs is considered the best investment bank, they may be shaddy, but they undeniably make the most amount of dollars.

3. Seasonality on the last week of the year + bullish January seasonality will boost stock prices for month ahead

Technical analysis:

1. Daily chart shows bearish since its still in a down trend. But we have strong support at 87.50, and bounced 3 times already. Hmm, didn't I say this number before? It is the worth of the cash position I mentioned earlier.

2. XLF, the financial sector etf is a big chop, but we are at the lower range of a the consolidation which IMO is a good buy.

My stop is the low of the 52week low. It has strong support. However, I am not going to "hope" that it will recover in value if it goes below this point. The risk is about 10%, so I recommend a risk appetite of 3% of your portfolio or 33% position.

UPDATE: 1-11-2012 moving stop to 94.50, right below the gap. Lock in some profit.

UPDATE2 1-12-2012 moving stop to 96.9, right below the opening gap. Market is unstable.