The financials have stalled of late. The run up in bonds(drop in yields) has cast a cloud over the sector. Are they poised for a rebound?
Despite the extreme overhead pressure shares of MS are working on a third straight higher monthly low. The stock left behind an ugly spike high after a steep post earnings(Jan. 17) drop. MS has been consolidating in a narrow range since.
The $40.00 area has proven to a be a solid support zone(Feb/March lows).
A close above $43.20 would clear the initial March/February highs. MS will have room run once this area is taken out.
We consider MS a low risk buy near current levels. On the downside a close back below this week’s low($41.65) would indicate more sideways action is ahead before a fresh rally leg can take hold.
We are long MS in some managed accounts.