The banking sector tends to move in unison, often going higher during strong economic conditions. In addition, a rising rate environment with higher yield spreads is also a positive for the financials the net interest margin (NIM) expands. This is a key profit driver to the bottom line that has been missing since the Fed instituted their zero interest rate policy (ZIRP) some years ago. Some of the recent earnings released by banks showed some encouraging signs, and rates have started to move up. This could be a sign of higher inflation or perhaps stronger growth ahead, or a combination.
The charts of course tell the story of money flows, and regardless of the fundamental arguments if the big money is coming into these names then there is certainly something of substance 
happening. Morgan Stanley is one of those names that is showing good volume and strong price action. The recent run of higher post earnings in mid April has been impressive, with solid relative strength and improving technical patterns. The gap just above 38.5 (arrow) begs to be filled, while the late 2014 high is a good first target.
Morgan Stanley, a financial holding company, provides various financial products and services to corporations, governments, financial institutions, and individuals worldwide. The company’s Institutional Securities segment offers financial advisory services on mergers and acquisitions, divestitures, joint ventures, corporate restructurings, recapitalizations, spin-offs, exchange offers, leveraged buyouts, takeover defenses, and shareholder relations, as well as provides capital raising and corporate lending service
Morgan Stanley Chart Analysis
Take a deeper dive into the chart action and learn how to read the technicals as I walk you through Morgan Stanley (NYSE: MS) and my analysis as I mark up our chart of the week.
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