Financials have been one of the weakest corners of the market lately, thanks to credit worries and falling interest rates.
Of all the big names, Morgan Stanley has held up the best. It’s down less than 3 percent on the year, compared with drops of more than 20 percent for other key stocks like Bank of America and JPMorgan Chase.
MS has performed better fundamentally because it has more exposure to wealth management. That helped it deliver a strong quarter the last time earnings were reported on July 16.
The stock jumped at the time but didn’t go far. One reason was that stochastics were overbought. Another was the fact its 50-day simple moving average (SMA) was below the 200-day SMA.
Both of those conditions have now flipped. Stochastics show an oversold condition, and a “Golden Cross” of the 50-day SMA above the 200-day SMA occurred on July 17.
MS is also showing signs of basing out around the same $49 area that marked the top of its range in late June and early July. Notice the recent hammer candlesticks around that level. It’s also nuzzling the 50-day SMA.
Traders may want to take a long bias as long as MS remains above the 50-day SMA, or the July 31 low of $48.27.
Of all the big names, Morgan Stanley has held up the best. It’s down less than 3 percent on the year, compared with drops of more than 20 percent for other key stocks like Bank of America and JPMorgan Chase.
MS has performed better fundamentally because it has more exposure to wealth management. That helped it deliver a strong quarter the last time earnings were reported on July 16.
The stock jumped at the time but didn’t go far. One reason was that stochastics were overbought. Another was the fact its 50-day simple moving average (SMA) was below the 200-day SMA.
Both of those conditions have now flipped. Stochastics show an oversold condition, and a “Golden Cross” of the 50-day SMA above the 200-day SMA occurred on July 17.
MS is also showing signs of basing out around the same $49 area that marked the top of its range in late June and early July. Notice the recent hammer candlesticks around that level. It’s also nuzzling the 50-day SMA.
Traders may want to take a long bias as long as MS remains above the 50-day SMA, or the July 31 low of $48.27.
