Goldman Sachs Stands Out, Nike Falls Flat. Best and Worst Dow Charts. -- Barrons.com

By Doug Busch

The Dow Jones Industrial Average may no longer live up to its name-it is far from a pure industrial gauge in an economy dominated by technology, finance, and consumer brands-but it still rewards close attention.

While most market watchers fixate on the Nasdaq Composite or the broader S&P 500, the Dow's 30 blue-chip constituents offer a clearer window into the markets true leaders and laggards. Two charts, in particular, stand out right now: Goldman Sachs is my favorite, and Nike is my least.

All three major averages remain within 1%-2% of their all-time highs and have broken above constructive chart patterns, underscoring the market's continued strength. Over the past year, however, the Nasdaq has been the clear leader, gaining 23%, followed by the S&P 500 at 20% and the Dow at 19%.

That leadership gap could become more important if the market takes a leg lower, as seasonal trends suggest is a distinct possibility heading into the end of the third quarter. In that scenario, the Dow's more defensive blue-chip names could offer greater relative stability than the growth-oriented stocks that dominate the Nasdaq and S&P 500.

Perhaps it is no coincidence that my favorite chart belongs to the Dow's highest-priced stock, Goldman Sachs, while my least favorite belongs to the lowest-priced name, Nike. Let's look at both of their technical pictures.

Goldman Sachs, a premier global financial-services firm, has gained 44% over the past year. Encouragingly, its major peers have also delivered strong returns, with Morgan Stanley and Citigroup up 50% and 47%, respectively, over the same period. That broad-based strength is a positive sign, as you want to see Goldman participating in a rising financial sector rather than carrying the group's performance alone. I wrote about this stock in March and it is up 33% since then.

Looking at the daily chart, Goldman Sachs has displayed superior relative strength against the iShares U.S. Broker-Dealers & Securities Exchanges ETF over the past year. Since the beginning of June, however, the chart has flashed several bearish candlestick signals, including a bearish engulfing pattern on June 5, a doji on June 17, and an evening star completed on July 16. The very next session added another warning sign with the completion of a bearish island reversal.

Despite those signals, GS has continued to hold above the very round $1,000 level. The stock has also traded below its 50-day simple moving average throughout August, suggesting near-term momentum has weakened. I could see some additional softness toward $1,000, which would also bring the stock back toward the area of its May 13 cup-with-handle breakout above the $952.11 trigger.

Longer term, however, I remain bullish. I see a path to $1,225 by year-end, representing a 17% gain from current levels. Remain bullish above $975.

Goldman Sachs was trading around $1030 Tuesday.

Nike, a former footwear and apparel leader, has not kept pace with the bull market at all, down 50% over the last year, and 10% over the last month. I think the weakness is company-specific, and I wrote about that recently, but other footwear names like Deckers and Birkenstock are 28% and 29% off their respective 52-week highs.

Turning to Nike's daily chart, its weak relative strength over the past year is evident on the ratio chart versus the broader State Street SPDR Retail ETF. Candlesticks have also been instrumental in identifying near-term tops, dating back to consecutive doji candles on Oct. 1-2. Another doji appeared on Feb. 20, filling an upside gap from the Dec. 18, 2025, session, the day before the stock plunged 10% following earnings.

The technical picture has remained weak, with Nike trading below its downward-sloping 50-day SMA for the past 12 months. Monday added to the bearish setup as the stock broke below both a descending triangle and the $40 level, erasing much of the optimism generated by its July 1 earnings beat, when shares jumped 5%.

I expect the downtrend to accelerate, with the stock potentially reaching $32 by year-end, representing an 18% decline from current levels. Remain bearish below $42.50.

Nike was trading around $40 Tuesday.

Doug Busch is the senior technical analyst at Barron's Investor Circle. His technical view is added to stock picks, including those published exclusively for Investor Circle readers. A glossary of technical terms is updated regularly with new entries.

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

August 18, 2026 13:42 ET (17:42 GMT)