Morgan Stanley (MS) - Get Report is beginning to stabilize after a steep sell off. The stock began to falter last week after barely reaching its ninth-straight higher monthly high. This week, the increasing overhead pressure took a toll as downside volume accelerated dramatically. This drop has driven MS back down to a major support and low-risk entry opportunity for patient investors.
Back in mid January, MS suffered a nasty sell off. The stock's powerful post-election rally appeared headed for a healthy pullback but by the end of the month, it was clear the damage had remained minimal. A very solid support zone near the $41.50 area held up extremely well and by the start of February, MS was back in rally mode. The stock went on to make new rally highs in mid February after bouncing more than12% from the mid January lows. It wasn't until this month that the stock reached upside exhaustion.
The recent bout of weakness has driven MS back down to the $41.50 area. This major support zone includes the 2015 high near the lower band as well as the December, January, February lows. In the near term, MS investors should consider the stock a low-risk buy near current levels. The stock could potentially build a very solid base here. Just maybe the selling earlier this week was an overreaction.