MS still stuck within tight trading range
Morgan Stanley (MS) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, MS ended the month 9.28% higher at 48.30 after gaining $1.06 (2.24%) today, outperforming the S&P 500 (1.54%). The bulls were in full control today, moving the market higher throughout the whole session. Closing above Monday's high at 47.80, the share confirmed its breakout through the previous session high after trading up to $0.73 above it intraday.
Daily Candlestick Chart (MS as at Jun 30, 2020):
Tuesday's trading range has been $1.47 (3.12%), that's slightly below the last trading month's daily average range of $1.80. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently notably lower than usual for MS. Prices continued to consolidate within a tight trading range between 46.42 and 48.86 where it has been caught now for the whole last trading week.
Notwithstanding a weak opening Morgan Stanley managed to close above the prior day's open and close, forming a bullish Engulfing Candle. Additionally, two candlestick patterns are matching today's price action, the White Candle which is known as bullish pattern and one bearish pattern, the Bearish Hikkake Pattern.
The market managed to close back above the 20-day moving average at 47.85. When this moving average was crossed above the last time on June 25th, MS actually lost -3.57% on the following trading day. Prices are trading close to the key technical resistance level at 48.68 (R1).
The stock shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might accelerate should prices move above the nearby swing high at 48.86 where further buy stops could get activated. Selling might speed up should prices move below the close-by swing low at 46.42 where further sell stops could get triggered.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Hikkake Pattern" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Morgan Stanley. Out of 125 times, MS closed higher 54.40% 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 53.60% with an average market move of 0.40%.