SIA Charts’ relative strength rankings help investors identify opportunities in stocks which are outperforming their peers or index benchmarks on a relative basis. Outperformance often reflects improving investor expectations for strong company growth or sector growth. The rankings not only help investors to identify which stocks in a universe are outperforming and underperforming against their peers, but also when relative performance trends are changing.
In today’s edition of the Daily Stock Report, we are going to take a look at a US Financial, Morgan Stanley (MS). MS recently re-entered the Favored Zone of the SIA S&P 100 Index report on May 12th at a price of $127.06. The shares are showing strong relative strength moves up the SIA S&P 100 report, gaining 1 spot in the last month and 32 spots in the last quarter. These gains exemplify the consistent money flow increases in the shares over the past little while. Currently the shares reside in the 17th spot out of 103 positions in the report.
In looking at the attached candlestick chart of Morgan Stanley, the shares were in a long 3-year sideways consolidation range from mid 2021 to mid 2024. We also see the shares find a strong layer of support at the mid to high $60 area three times in June 2022, October of 2022, and October of 2023. Then in mid 2024 the uptrend asserted itself with a steady pattern of higher highs and higher lows, ultimately reaching its peak in January of this year at $140.00. A brief but rather sizeable pullback ensued in the first quarter of this year when the markets had its “jitters” but since the market stabilization in April the shares are attempting to make a charge at its most recent high where the shares bumped their head in January at the $140.00 area. In closer analysis of the chart the shares have surpassed the January high and are currently trading at the $141.00 level as of yesterday’s close. It will be interesting to see going forward, its this potential breakout can materialize further and a new upleg can be established.
The benefit of looking at Point and Figure Charts is that one can see more precisely upcoming support and resistance points. In looking at the Point and Figure chart at a 2% scale for an investment grade analysis, we see the shares have indeed surpassed the early year high at the prior resistance level of $140.99. Two additional boxes of X’s have formed since the prior column of rising X’s in February confirming a new upleg may, in fact, be transpiring. Currently the shares are in a very strong rising column of X’s lasting 18 boxes so a pause in this uptrend to digest this move can certainly materialize. However, based on a measured move, next resistance currently stands at $152.61. On the downside, if a pause materializes, support is at its 3-box reversal of $132.86 and, below that, $122.74. The shares currently exhibit a bullish Spread Double Top pattern and with an SMAX score of 10 out of 10, the shares are exhibiting very strong near-term strength against the asset classes.
Morgan Stanley is a global investment bank whose history, through its legacy firms, can be traced back to 1924. The company has institutional securities, wealth management, and investment management segments. The company had over $4 trillion of client assets as well as over 80,000 employees at the end of 2022. Approximately 50% of the company's net revenue is from its institutional securities business, with the remainder coming from wealth and investment management. The company derives about 30% of its total revenue outside the Americas.
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