Chart of the Day: Mixed Readings on Morgan Stanley

With earnings out on Morgan Stanley (MS) today -- and reactions mixed as some investors were disappointed with guidance -- we find the chart is rather mixed, too. The stock is down more than 4.5% on Tuesday in the late afternoon. The charts seems to agree with indicators leading toward some downside action.

Indicators are rolling over as we see here, the Traders Dynamic Index (TDI) indicator at the bottom shows this stock's relative strength is not keeping up with the movement in Bollinger bands. That seems to have stopped the stock's momentum in its tracks.

The top pane shows a nice, long uptrend with a series of higher-highs and higher-lows. That would be the textbook definition of a stock in an uptrend. But money flow is weaker, too, that is a concern when it is bending lower. Basically this implies big money managers are moving funds away from Morgan Stanley. It makes some sense, after such a huge run from late October. MS ran from $70 to $90 in just two months.

The candles in the top pane also show some concern for the uptrend. The colors have changed from blue to teal, from strongly bullish to cautiously bullish. Now, if this corrective period is over, we should see a nice long base between support zones at $85 and resistance up at $92.

But if the stock bases here for weeks and makes a run to the $93 area, then the bulls have something to work with. We like MS and rate it a "Two" in the Action Alerts PLUS portfolio.

https://share.trendspider.com/chart/MS/4669dk7r0w

At the time of publication, AAP was long MS.