Chart of the Day: This Bank Holding Is Leading the Pack
It is hard to argue with this name, which has robust fundamentals and an envious chart.
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The financials/brokerage group has delivered some of the best returns on all of Wall Street this year. Much of the larger gains have come as recently as September when this group started sniffing out a win by Republicans in the recently ended election.
Now, why should financials be concerned about political outcomes? One word comes to mind: regulation. The regulatory bodies are strangling these companies, not allowing them to flex their financial muscles, and earn the most dollars for their shareholders.
The idea here is Republicans will place less regulatory restrictions on banks, and roll back or eliminate these restrictions to allow the banks/financials to earn robust gains. That's the concept, and investors seem to have bought in.
So much has been written about it, but if we look at the dollars being placed behind the investment, names like Morgan Stanley MS are simply leading the pack. The chart of JPM shows a massive move after the election on strong volume, and the buyers are still coming after it! That's power.
Though momentum is slowing down a bit, we like the posture here as the stock works off an overbought condition, a sideways consolidation until the next move, which we believe is higher. See the strong money flow from September to October — they knew!
We like Morgan Stanley here and rate it a Two in TheStreet Pro Portfolio.
At the time of publication, TheStreet Pro Portfolio was long MS.
