Wall Street is bracing for Goldman CEO Lloyd Blankfein's testimony on Tuesday in which he will respond to fraud charges brought by the SEC.
As you likely remember, the government is alleging, in a civil case, that Goldman fraudulently marketed a financial instrument by hiding vital information from investors, including the role that hedge fund Paulson & Co played in its creation.
After hours, Senator Carl Levin who will be leading the questioning, accused the bank of putting its own interests ahead of its clients. The commentary suggests that the questioning could be rather contentious.
Goldman has vehemently denied the charges calling them ‘unfounded in both law and fact.”
Meanwhile, traders have been trying to make heads or tails of this stock ever since the charges surfaced about 10 days. Fundamentals are bullish but technicals are terrible.
What’s the trade?
Strategy Session with the Fast Money traders
If you’re trying to play Goldman, I’d watch the charts, says Tim Seymour. I don’t think this is a case of getting bullish because of valuations.
I believe that Goldman Sachs is innocent, but I think $150 is the bogey, says Guy Adami. For a trader that’s an important level. Now we have to wait and see if it holds. If not the downside, could be rather sharp.
If you’re thinking about trading this name, I’d make sure to buy put protection, adds Pete Najarian.
I agree with the other traders that trouble probably still lies ahead, adds Anthony Scaramucci of Skybridge.
I added to my Goldman position at $153, counters Zach Karabell of RiverTwice on the Halftime Report. Given the magnitude of the sell-off in the stock, and their incredible earnings, I think value investors will help propel GS higher.
In the space, I'd look at a long position in Morgan Stanley, adds Joe Terranova. Goldman's pain could be their gain.