Score 7.5 (out of 10): MORGAN STANLEY sets up for +11.3% rally in 2 months

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What’s Going On Here?

Shares of banks have declined recently, following a drop in bond yields because bank stocks make more money off their asset base when interest rates are higher. Unlike JP Morgan, Morgan Stanley is not an interest rate-sensitive bank. Over the years, Morgan Stanley has transformed its business model and the company’s return on equity has been primarily been driven by the fee- based and recurring revenue streams through the acquisitions of E-Trade and Eaton Vance.

Why Now?

MORGAN STANLEY has triggered a new technical analysis ‘rally reversal’ signal. During similar occasions, MORGAN STANLEY shares had a median return of +11.3%, over the following 2 months – based on 10 historical occasions with 7 of those showing positive returns (70%). This buy signal for MORGAN STANLEY received a high score of 7.5 (out of 10). This insight was generated on 2021-December-7 with last price of 99.27.

What’s This Company About?

MORGAN STANLEY is in the Diversified Banking Inst business. Based on the last 2 years’ risk/return profile, this asset is seen as Less Risky. ‘Wall Street’ analysts think the stock price will be worth 12.1% more (average). Ticker symbol: MS US.

What’s My Risk / Reward and Time Horizon?

We found 2 months to be the optimal trade horizon, after testing a number of possible alternatives (accuracy of previous returns). Otherwise consider closing out this trade once the target level of 110.48 (+11.3%) has been reached. Based on MORGAN STANLEY’s recent up and down swings, LongShortBets suggests considering to set a stop loss level for this insight at 92.47 (last price at 99.27), which is equivalent to a -6.9% decline.

Returns during similar periods:

The chart above shows the previous returns (in %) based on similar setups with the most recent ‘insight’ shown under (1), the second most recent ‘insight’ shown under (2), etc. 

Previous episodes:

0.2% (October-2021), 18.2% (July-2021), 11.9% (April-2021), 31.9% (October-2020), 26.9% (March-2020), 16% (August-2019), -4.1% (June-2019), 10.7% (March-2019), -6.2% (November- 2018), -7.2% (September-2018).

Historical Chart:

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Summary:

NameMORGAN STANLEY
ViewUp
Star (1 to 10)7.5
Target+11.3%
Time2 months
Hit Rate70%

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