Morgan Stanley (MS) chart forms topping tail: Seven-month rally shows fatigue

As one of Wall Street's premier investment banking and wealth management firms, Morgan Stanley (MS) has delivered an impressive performance throughout 2025. But after a relentless climb from April's lows, the chart is now flashing a warning signal that demands attention.

Let's start with what's been working. Since bottoming near $108 in April, MS has followed a textbook uptrend, riding a clean ascending trendline that's provided reliable support through multiple tests. Each dip back to this line became a launching pad for the next leg higher, ultimately propelling shares to a peak around $168 in October. That's a gain of roughly 55% in just seven months—the kind of move that turns heads and fills portfolios.

But then something shifted. At those October highs, price formed what we call a "topping tail"—a long upper wick that tells the story of buyers pushing aggressively higher, only to have sellers slam the door shut. This rejection candle is more than just noise; it's a real-time battle where bulls lost. When you see this kind of reversal after an extended rally, it often marks exhaustion rather than a brief pause.

The technical setup here is fairly straightforward. MS is currently trading around $162, still above that ascending trendline support that's been so reliable. As long as that line holds, bulls can argue the uptrend remains intact. However, if we see a decisive break below this support—and that's the key word, decisive—the chart points toward $139 as the next logical downside target. That level represents a retracement back toward prior consolidation zones and would represent roughly a 14% decline from current levels.

For traders watching this unfold, the trendline is your line in the sand. A breakdown accompanied by increased volume would confirm that the character of this trend has changed. Conversely, a bounce here that reclaims the recent highs would invalidate the topping tail thesis and suggest the bulls still have control.

What makes this particularly interesting is the timing. MS operates at the intersection of capital markets activity, M&A advisory, and wealth management—all businesses that are sensitive to market sentiment and economic conditions. Technical weakness here could reflect broader concerns about fourth-quarter trading volumes or deal flow heading into year-end.

The bottom line: Morgan Stanley's chart has shifted from clear uptrend to inflection point. That topping tail wasn't just a single bad day—it was a signal. Whether it marks a temporary pullback to support or the beginning of a deeper correction depends entirely on how price interacts with that ascending trendline in the sessions ahead. Watch that line closely.