Morgan Stanley - (MS) - October 4, 2023
Caught between the negative impacts of rising interest rates and falling stock and bond markets, investment banks like Morgan Stanley (MS) have been struggling in the relative strength rankings this year. MS, for example, exited the green zone of the SIA S&P 100 Index Report back in April and spent the summer bouncing along the boundary between the yellow zone and the Red Unfavored Zone. In the last month, MS has dropped 9 spots to 59th place.
There are few financials left in the Green Zone as potential replacements, only Berkshire Hathaway (BRK.B).
A major breakdown is underway in Morgan Stanley (MS) shares. The investment bank has not been above $100.00 but the formation of a symmetrical triangle of higher lows and lower highs suggested that that the stock was in a consolidation phase. Since the beginning of this year, however, steepening resistance lines have suggested that distribution was intensifying. In the last few days, the shares have decisively broken down, snapping an uptrend support line, causing the triangle to fail, and then taking out a horizontal support line at $80.00 yesterday to confirm the start of a new downtrend.
Previous lows suggest potential downside support levels on trend may appear near $72.50, then $69.00, and $62.50 on trend. Initial rebound resistance appears at the recent breakdown point near $85.00.
Morgan Stanley (MS) soared up out of the 2020 market bottom and extended its rally through 2021, but since peaking in February of 2022, it has generally been trending sideways. Back in August, the shares peaked at another lower high and have been under distribution in recent weeks. Moving into October, MS has decisively broken down, completing bearish Double Bottom and Spread Double Bottom breakdowns to signal the start of a new downleg.
Initial downside support may appear at a retest of the July 2022 low near $69.35, followed by $66.65, where a horizontal count converges with a long-term 45-degree uptrend support line. Initial resistance on a bounce appears near $84.50 based on a 3-box reversal.
With its bearish SMAX score falling to 3, MS is exhibiting weakness against the asset classes.
Disclaimer: SIACharts Inc. specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investors investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIACharts Inc. nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.