Technical Analysis – Morgan Stanley stock moves above 200-day simple moving average

Anthony Charalambous, XM Investment Research Desk

Morgan Stanleys’ stock has been incrementally following the north road since the end of December, and in the last month has risen from a three-month low of 40.40 to face the ultimate battle with the 200-day simple moving average (SMA). Presently, it is facing short-term resistance at the previous weeks’ break high above the 200-day hurdle of 45.00.

Momentum cooled after the 200-day break, as also shown by the RSI as it points down in the positive area, whereas the ADX recently moved to areas of trend kickoff. The short-term 21-SMA has started to cross the 200-SMA upwards, whereas the long-term 100-SMA is already above it and headed further north.

On the way up, a break of the 45.00 immediate resistance and latter 45.90 obstacle, could produce a test of the seven-month high of 48.65. A bullish continuation could then breed levels around 50.40 – 51.35, before any consideration of a further bolt to catalyze the test of the Fibonacci extensions of 138.2% and 161.8%, close to the all-time high of 59.33.

Downwards, a 45.00 resistance hold could prompt an immediate test of the 100- and 200-day SMAs around 43.85 – 43.60. Fracturing the support of 42.20 would be next before a shift to a bearish bias. A breach of the three-month lows next to 40.40 – 40.10 could then be considered.

Overall, the short- and medium-term bullish bias outweighs the risk to the down move.