MS fails to close above 20-day moving average
Morgan Stanley (MS) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, MS ended Thursday at 35.71 gaining $1.72 (5.06%), strongly underperforming the S&P 500 (6.24%). Closing above Wednesday's high at 35.48, Morgan Stanley confirmed its breakout through the prior session high after trading up to $1.37 above it intraday.
Daily Candlestick Chart (MS as at Mar 26, 2020):
Thursday's trading range has been $3.52 (10.41%), that's slightly above the last trading month's daily average range of $3.11. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for MS.
Two candlestick patterns are matching today's price action, the White Candle which is known as bullish pattern and one bearish pattern, the Last Engulfing Top Pattern.
Prices are trading close to the key technical support level at 32.90 (S1). After spiking up to 36.85 during the day, the share found resistance at the 20-day moving average at 36.79. The last time this happened on February 3rd, MS actually gained 2.70% on the following trading day.
Though the stock is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Bounce off SMA 20" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Morgan Stanley. Out of 47 times, MS closed higher 53.19% 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 61.70% with an average market move of 1.29%.