Chart of the Day: Morgan Stanley Is Ready for Prime Time
Strong markets are often a good sign of health for investment banks, and since we really only have two pure plays left on the public market it is easy to compare and contrast. Goldman Sachs ($GS) and Morgan Stanley ($MS) are the two we are talking about here, but TheStreet Pro Portfolio has chosen to go with MS for its very strong dealmaking business, leverage and assets with a prior acquisition of E-Trade.
Morgan Stanley exceeded estimates in the prior quarter and raised guidance significantly. We expect to see the same when they report on Wednesday, July 15, before the opening bell.
The chart shows a nice trend of higher highs, higher lows. The blue candles indicate bullish on the GoNoGo composite of indicators. In that top pane we see the dots of the parabolic SAR (stop and reverse), which is also bullish. You might make a bearish case for the MACD, which had a bearish crossover right before the last dip, but we have seen a nice recovery near all-time highs. That is bullish behavior.
Money flow is bearish and that could be a fly in the ointment, but we’ll defer to the price chart as always, but with the understanding that big money is NOT flowing in at the moment. Relative strength is steady, and volume trends have slowed down a bit, but that will change this week. Expect a pickup in turnover especially if MS gets a move above $227.
We like MS in TheStreet Pro Portfolio and rate it a Two, or “stockpile on pullbacks.”
More Pro Portfolio:
- We’re Trimming 3 Positions as Renewed Tensions Flare
- 30 Signals Across the Portfolio’s 10 Themes and Strategies
- Weekly Roundup: Portfolio Extends Lead, Adds Firepower Ahead of Earnings Season
At the time of publication, TheStreet Pro Portfolio was long MS.
