Morgan Stanley (MS) is part of the financial sector and like the sector, it has been weakening since early 2022. Let's drill down into the charts and indicators to see if more weakness is possible.
In this daily bar chart of MS, below, I can see that prices have been trading below the 200-day moving average line for a couple weeks now. The 200-day line has operated as both support and resistance in the past year. Back in August and September the line was resistance and in December it reversed gears and acted as support. The On-Balance-Volume (OBV) line has moved down sharply from the middle of February and tells me that sellers have turned aggressive.
The trend-following Moving Average Convergence Divergence (MACD) oscillator is below the zero line and having trouble generating a cover-shorts buy signal.
In this weekly Japanese candlestick chart of MS, below, I see a weakening picture. Prices have rallied since the middle of 2022, but notice the action of the indicators. Prices are trading below the flat 40-week moving average line. The weekly OBV line has moved sideways while prices moved up suggesting a lack of aggressive buying. The MACD oscillator has crossed to the downside for a take-profit, sell signal.
In this daily Point and Figure chart of MS, below, I can see a potential downside price target in the $74 area.
In this weekly Point and Figure chart of MS, below, a price target of $64.
Bottom line strategy: MS has navigated a difficult environment in the financial services industry for many years, but maybe the conditions ahead will be more challenging. I recommend a defensive position
