Will Morgan Stanley Move Higher?

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With shares of Morgan Stanley (NYSE:MS) trading around $29, is MS an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework.

T = Trends for a Stock’s Movement

Morgan Stanley is a global financial services company that, through its subsidiaries and affiliates, provides its products and services to a range of clients and customers: corporations, governments, financial institutions, and individuals. The company operates in three segments: institutional securities, global wealth management group, and asset management. Morgan Stanley provides financial advisory and capital-raising services; equity, fixed income, and alternative investments; and merchant banking services. It participates in an industry that powers most other types of businesses around the world.

Morgan Stanley appointed Patrick Delivanis to take over as investment banking head in the Middle East and North Africa, according to a person with knowledge of the matter who spoke to Bloomberg. Delivanis takes over with immediate effect from Klaus Froehlich and has worked for the New York-based bank in Dubai since 2007, according to the person, who asked not to be named by Bloomberg, as the information isn’t public. Froehlich becomes head of global capital markets for Germany and Austria, the person said to the news service. Morgan Stanley was the Middle East and Africa’s top M&A adviser last year, working on deals valued at $11.8 billion, according to data compiled by Bloomberg. Froehlich, in an interview last week, said the bank was predicting the return of initial public offerings worth more than $1 billion in the Persian Gulf this year after asset values and stock markets rallied.

T = Technicals on the Stock Chart Are Mixed

Morgan Stanley stock has been trending higher in recent months. The stock is currently trading sideways and may need time to stabilize. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Morgan Stanley is trading between its rising key averages, which signals neutral price action in the near-term.

MS

Source: Thinkorswim

Taking a look at the implied volatility (red) and implied volatility skew levels of Morgan Stanley options may help determine if investors are bullish, neutral, or bearish.

Implied Volatility (IV)

30-Day IV Percentile

90-Day IV Percentile

Morgan Stanley options

26.76%

26%

23%

What does this mean? This means that investors or traders are buying a minimal amount of call and put options contracts as compared to the last 30 and 90 trading days.

Put IV Skew

Call IV Skew

March Options

Average

Average

April Options

Average

Average

As of Tuesday, there is average demand from call and put buyers or sellers, all neutral over the next two months. To summarize, investors are buying a minimal amount of call and put option contracts and are leaning neutral over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

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