The action in the financials doesn't tell the whole story, Cramer wrote in his recent column. When it comes to the banks, there are actually three tiers, he said, and there's a big difference between the best and the worst.
At the top of the pile are the investment banks of Goldman Sachs (GS) and Morgan Stanley (MS) . These banks don't have huge loan losses and their wealth management businesses are on fire, Cramer noted.
Let's check out the charts of MS today.
In this daily bar chart of MS, below, we can see that prices have been moving sideways to slightly higher since June. Prices are now above the declining 50-day moving average line and above the basically neutral 200-day moving average line.
The On-Balance-Volume (OBV) line has moved sideways since July but looks close to making a new high for the move up. A rising OBV line would tell us that buyers of MS are being more aggressive.
The Moving Average Convergence Divergence (MACD) has crossed to the upside from below the zero line for a cover shorts buy signal. If MS crosses the zero line it will be an outright go long message.
In this weekly bar chart of MS, below, we can see a mixed picture. Prices are above the 40-week moving average line but the slope of this indicator is still negative.
The weekly OBV line is up from their April low but also well below the highs seen at the beginning of the year.
The weekly MACD oscillator has crossed to the downside for a take profits sell signal.
In this daily Point and Figure chart of MS, below, we can see a $59 price target but we can also see some overhead resistance using the volume by price bars (left scale).
In this weekly Point and Figure chart of MS, below, we can see a potential downside price target in the $42 area.
Bottom line strategy: With a bullish daily Point and Figure chart and bearish weekly chart I do not feel confident enough to recommend a long trade at this point in time. Let's keep an open mind and revisit the charts in a few weeks.
(Goldman Sachs is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells GS? Learn more now.)
