You don't have to be an expert technical analyst to figure out why shares of Morgan Stanley (MS - Get Report) are starting to look bearish -- the setup in this toxic name is pretty straightforward. Shares of MS have been in a textbook uptrend since this past summer, but the most recent test of trend line support got violated, leaving the financial giant's stock below the channel this week.
That's not out of left field -- all trend lines eventually break sooner or later. And while MS' uptrending price action in the channel was a good reason to own shares for most of the last year, the break is a signal for the most risk-averse owners to start selling. Not surprisingly, most trading signals come in shades of gray that synch up with risk tolerance. For the less risk-averse, shares are still very close to trend line support right now; $29 is the last ditch stronghold for buyers. If MS can't catch a bid at $29, then support in the mid-$20s looks like the next likely stopping point.If you decide to go short MS here, I'd recommend keeping a protective stop right at the 50-day moving average.