Chart of the Day: As Morgan Stanley Steadies, Keep an Eye on This Key Level
Sideways action before the earnings season is what we want to see.
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Morgan Stanley MS, like many other banks, has rallied smartly since bottoming out in early April.
The stock has made a powerful move that was supported by very strong turnover and bullish technical indicators. A series of higher-highs and higher-lows meets our textbook definition of an uptrend.
But as the stock rallied up to meet March highs, the overbought condition started to weigh on Morgan Stanley. So, we are in the base-building process, a period where there the stock can take a rest and move sideways before the next phase for MS, which we believe will be higher.
Notice the candles are blue again, that is bullish on the GoNoGo composite of indicators in the top pane. Volume trends have slowed down considerably, that is what you like to see during a consolidation period.
Money flow, as seen in the bottom pane, remains strong and momentum is starting to turn higher. Staying above the "breakdown" level (horizontal line in the top pane) is key and we believe will support the stock on any move down, where dip buyers would be activated.
We like Morgan Stanley in TheStreet Pro portfolio and rate it a "One," buy at anytime.
The Pro Portfolio is long MS.
