Morgan Stanley (NYSE: MS) reported earnings Friday morning, concluding week one of the first-quarter season.
Like its five competitors, Bank Of America Corporation (NYSE: BAC), Citigroup Inc (NYSE: C), Goldman Sachs Group Inc (NYSE: GS), JPMorgan Chase & Co. (NYSE: JPM) and Wells Fargo & Company (NYSE: WFC), Morgan Stanley beat expectations.
The banking sector has spent April consolidating after a parabolic move during the last part of 2020 and first part of 2021. Morgan Stanley’s stock is up over 60% from November.
Morgan Stanley reported revenue of $15.7 billion, beating the Street’s estimate of $14.09 billion, and EPS of $2.22 against an estimate of $1.70.
The Morgan Stanley Chart: Morgan Stanley’s stock is trading above both the eight-day and 21-day exponential moving averages after the eight-day EMA crossed above the 21-day EMA on Wednesday.
On Thursday, Morgan Stanley printed a red hammer candle stick. This type of candle stick is considered bullish because the lower wick means bulls bought the stock when the price dipped. This could indicate higher prices will come over the next few trading sessions.
On Friday, Stanley Morgan’s stock opened slightly above the resistance level at $80.87 but quickly lost it. The stock has been battling this area of resistance for the last six trading days and has failed to close above it since March 22.
Bulls want to see Morgan Stanley’s stock close over the resistance level it's battling, which would keep it propped up above the eight-day and 21-day EMAs. If the stock can climb above and close over the $81 mark, it has room to move up to $83.79.
Bulls want to see another rejection and a close below resistance. If Morgan Stanley’s stock loses Thursday’s low of the day, it will cause the eight-day EMA to cross below the 21-day EMA, which is bearish. If Morgan Stanley is unable to close above the upper resistance, it can revisit $77.53.
If it loses that level of support there isn’t much left until $73.72.
It’s interesting to note that in February, Morgan Stanley broke through a two-decade-old resistance level (in yellow) at $77.53. The stock is trading at its highest levels since October 2000.
In September 2000 Morgan Stanley made an all-time high of $93.32.
MS Price Action: Morgan Stanley was trading down 3.15% at $78.32 at last check Friday.
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