MS closes lower for the 2nd day in a row
Morgan Stanley (MS) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, MS ended the week 1.47% higher at 55.84 after edging lower $0.09 (-0.16%) today on low volume, slightly underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Trading $0.22 higher after the open, the share was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (MS as at Feb 14, 2020):
Friday's trading range has been $0.58 (1.04%), that's far below the last trading month's daily average range of $0.92. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for MS.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
Prices are trading close to the key technical support level at 55.49 (S1). After having been unable to move lower than 55.50 in the previous session, the stock found buyers again around the same price level today at 55.54. The last time this happened on January 10th, MS gained 1.09% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could accelerate should prices move above the nearby swing high at 56.66 where further buy stops might get triggered. Selling could speed up should prices move below the close-by swing low at 55.50 where further sell stops might get activated. With prices trading close to this year's high at 57.57, upside momentum could accelerate should the market be able to break out to new highs for the year.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior High" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Morgan Stanley. Out of 572 times, MS closed higher 53.15% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 56.82% with an average market move of 0.71%.