Goldman Sachs (GS) - Get Report continued to rebound yesterday. The stock finished last week in a very vulnerable position after four straight loses. This week, GS has firmed up nicely, and it closed Tuesday well above last week's low. The stock is still rangebound, but the setup has turned much more bullish of late.

For Goldman Sachs bulls, the stock has settled into a low-risk buy zone as underlying support begins to strengthen.

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In early March, Goldman's rally off the February low stalled right at the 50-day moving average. Over the next three and a half weeks, the stock has traded in a narrow consolidation. During this period, Goldman Sachs has put in a higher monthly high and a weekly double top near the $159 area. This healthy basing action is now on the verge of giving way to an upside breakout. For patient GS bulls, a close above the initial March high of $158.90 will be an important hurdle. Once past this key resistance zone, a fresh rally leg could really get in gear.

Until the stock moves past the March highs, Goldman Sachs investors should remain positive on the stock as long as it holds above last week's low near $150. Between the $155 and $152 area, the stock is a low-risk buy. The initial upside target once a fresh trend is underway is the September low of $167.50. A close below $150 before the March peak is cleared would indicate that a more prolonged consolidation will be needed before the base is complete.

Disclosure: This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.