Morgan Stanley’s downturn is over: Is it time to jump in? [Video]

Morgan Stanley (MS), a leading financial services holding company, that offers services to corporations, governments, financial institutions, and individuals worldwide. The company operates three business units: Institutional Securities, Wealth Management, and Investment Management, providing a range of services from capital raising to investment management products. MS is listed on NYSE and is a component of S&P 500 under Financials.

On a longer timeframe, MS has been bouncing between $72 and $100 since 2021. The price rallied up to hit an all time high at $106 on 10 Feb 2022. However, the reaction was a sharp decline and broke the support of $91.50 on 17 Feb. This was accompanied by an increase in volume suggesting the presence of supply. The Wyckoff sign of weakness (SOW) continued until early March and the price then traveled in a down channel for several months.

The down trend continued until MS had a Wyckoff spring at $72 followed by two tests before starting a strong rally. The low volume pullback during the rally suggested decreasing supply.

Nevertheless, the price was unable to hit $91.50 and again retested the low of the range. However, the price formed a higher low and started a Wyckoff sign of strength (SOS) rally in mid October. On 30 Nov, the price broke above the resistance but could not commit above it, leading to a Wyckoff upthrust (UT). The reaction was a shallow pull back to around $83.50 suggesting bullish signs.

With earning results as catalyst, the price gap up with momentum on 17 Jan 2023. The price subsequently stayed committed above the axis of $91.50 and few of the bars showing demand tails in a bullish Wyckoff backup set up.

Bias

Bullish. According to the Wyckoff method, MS is now attempting to break out of BU and will continue to rally to challenge the all-time high $106. If successful at committing above that, the accumulation phase that started in 2021 would become the cause of a long mark up phase E rally ahead.

If the price breaks below $91.50, it is likely to retest the support of $83.50.

MS was discussed in detail in my weekly live group coaching on 31 Jan 2023 before the market opened. The improving market breadth together with many bullish trade entry setups could suggest a new bull run as discussed in the video below.