Chart of the Day: Morgan Stanley Fights Its Way Back
We saw an avalanche of selling last week but the big financial is making progress.
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Last week’s market schmeissing made a mess out of so many charts, but perhaps we have seen a bottom. There are signs this could be the case, but like any bottom there should be a basing period. Now, those with little attention span will tell you the best scenario would be a “V” bottom, or at least that would feel much better. I argue that a longer basing period sets up a more sustainable rally period for the markets down the road and much less volatile action.
Morgan Stanley (MS) is the example here. The stock is building a nice base, and while that Thursday beating was painful, the stock simply fell back to recent support. That tells us buyers continue to be interested, the price level firmly at the $180 spot. Will it hold? There is no guarantee as anything can change, but for now it appears to be quite firm.
Indicators remain bearish. Money flow is negative, the MACD is on a sell signal, and stochastics continue to roll down as the momentum slows. Candles are purple too, so bearish on the GoNoGo composite of indicators.
A rise above last Wednesday’s high (11/4) at $194 sets up for a higher high, higher low scenario — getting the bull trend started.
We like Morgan Stanley in TheStreet Pro Portfolio and rate it a Two, or “stockpile on pullbacks.”
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At the time of publication, TheStreet Pro Portfolio was long MS.
