Chart of the Week: Morgan Stanley
Good morning everybody. Time for our chart of the week, and this week we’re gonna be focusing on big investment bank Morgan Stanely; MS is the symbol here.
Let’s take a look at this stock. The chart is really looking strong here, and after a big huge gap up last week after earnings, it’s holding nicely.
So let’s take a look at this chart here.
So as you can see, the old resistance level was exceeded from early January just a couple of days ago. We didn’t get but one close above that area. Barely closed above there after the earnings released during the middle of April. We have a few gaps higher here that need to eventually get filled. But no question about it, higher highs, higher lows is our textbook edef of an uptrend.
So what has me interested here?
Now all the big banks – like JP Morgan, Goldman Sachs, Bank of America, Citigroup, Wells Fargo, and Morgan Stanley – have been holding up pretty nicely after reporting earnings a week or so ago.
But I like the Morgan Stanley chart here because it is the only one that broke out to an all time high. Of course ,Citigroup was close, but not quite there. Morgan Stanley moved to a new all time higher and is holding nicely here. This is what I like to see. I like to see a stock that gaps up nicely and holds in place for a few days.
Now technically, I follow the principles of William O’Neill who created Investor’s Business Daily – William O’Neill and Company. And that would be within four to seven days after a breakout – this would be the breakout day one – four to seven days you like to see the stock moving higher on higher volume than that particular day.
So we’re looking for a move above, say, $192-192.5. Once we get that move above there, it should be easy sailing to $200, maybe to $210.
Volume levels have been very bullish. Brisk volume the past couple of months, certainly in March when we saw the stock bottoming just below the 200 day moving average. It vaulted higher, made a set of higher highs, higher lows here and then it’s just been in this vacuum towards these time highs for the past month or so.
Money flow is strong. MACD is still on a buy signal.
And you see relative strength is overbought, but that doesn’t mean anything. That’s just a condition. Remember that doesn’t necessarily mean it’s a signal to sell. It may be a reason to take some money off the table. And that’s never an issue. Risk management is always on top of our mind.
But I do like the chart of Morgan Stanely, and I think that once we get above this congestion level up there after a little bit of sideways movement, we’ll get even more new highs with this big investment bank.
That’s MS, thanks so much for watching everyone.
