MS or Morgan Stanley is looking very weak and is venerable for a significant drop lower. Over the last week and month MS has been trending downards towards previous support at 21.78. The last few days MS has chopped around this level but has not tested it again. MS 's price action has formed two descending triangle patterns which are all dependent on a base at 21.78.
What make this level so important is that there is NO support below this level till 20.30 or about 6% lower and that support is even weak. The strong support is at 19.15 or 12% lower or 18.50 or 15% lower. The potential support levels are also right near the price targets for the descending triangles. Short-term MS has resistance at 22.33 which could be a litmus test to see if MS will drop below its support. A fail at this resistance level shows weakness in MS and sellers are in control and move high and MS in the short-term moves upwards towards 22.64. Of course longer-term it is very possible that MS can bounce off these levels again but a longer-term descending triangle is in play and MS would need to climb 6% and get above 23.50 for it be voided.
Keep a strong eye on this stock and watch for the break, if it does break it could signal lower prices for other financial stocks which in turn will put pressure on the market. This pattern looks very smilar to what is going on in EXPE and what occurred in AAPL.
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