MS closes within previous day's range
Morgan Stanley (MS) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
MS ended Wednesday at 51.15 gaining $0.76 (1.51%), significantly outperforming the S&P 500 (-0.46%). Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (MS as at Sep 16, 2020):
Wednesday's trading range has been $1.60 (3.17%), that's above the last trading month's daily average range of $1.18. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for MS. Prices continued to consolidate within a tight trading range between 50.06 and 51.91 where it has been caught now for the whole last trading week.
Morgan Stanley managed to close back above the 50-day moving average at 51.04. After spiking up to 51.91 during the day, the stock found resistance at the 20-day moving average at 51.65. The last time this happened on August 10th, MS actually gained 2.37% on the following trading day. The market found buyers again today around 50.31 for the third trading day in a row after having found demand at 50.27 in the prior session and at 50.30 two days ago.
While the share is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Selling might speed up should prices move below the close-by swing low at 50.27 where further sell stops could get activated.
Among the six 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. Though it is usually interpreted as bearish, it has actually shown to be bullish for Morgan Stanley. Out of 48 times, MS closed higher 54.17% 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 66.67% with an average market move of 2.13%.