Microsoft stock is not the focus of Morgan Stanley’s next test, but the bank is heading into Wednesday, July 15 before the opening bell with a chart setup that was described as ready for prime time. James "Rev Shark" DePorre wrote that the stock was long MS in TheStreet Pro Portfolio, even as money flow stayed bearish.
"No question the strong stock market has helped, but so has something else!" DePorre wrote. He also rated MS a Two, or "stockpile on pullbacks," signaling that the trade was still being treated as one to add to on weakness rather than chase after a sharp move.
MS near all-time highs
MS showed higher highs and higher lows, and the recovery came back near all-time highs. The blue candles on the GoNoGo composite of indicators signaled bullish conditions, while the dots of the parabolic SAR were bullish too. Relative strength was steady, which kept the setup intact even after the last dip.
The MACD had a bearish crossover right before that dip, so the chart was not clean in every respect. Volume trends had slowed a bit, and the next level that stood out was $227, where volume was expected to pick up if MS pushed through. For readers with exposure, that makes the report less about chasing a headline and more about whether the stock can keep the trend alive after earnings.
E-Trade and dealmaking
TheStreet Pro Portfolio chose Morgan Stanley over Goldman Sachs because of its very strong dealmaking business, leverage and assets, and the E-Trade acquisition. That mix helped explain why the stock stayed in focus ahead of the report: the setup was not just about one quarter, but about whether the business mix still supports the stock price.
Before July 15, Morgan Stanley exceeded estimates in the prior quarter and raised guidance significantly, giving the upcoming report a higher bar. If the next update matches that pace, the shares can defend the near-highs; if it falls short, the bullish chart work around MS will have to absorb a lot more than a standard earnings miss.
Wednesday, July 15, before the bell
Wednesday, July 15 before the opening bell is the moment that matters for holders of MS. TheStreet Pro was already treating the name as a Two, and TheStreet Pro Portfolio was long MS at the time of publication, so the report will determine whether that pullback-buying view keeps working or needs to be rethought after the numbers land.
Another stock's 25% jump showed how fast a partner call can move a name; for MS, the immediate question is whether Morgan Stanley can back a bullish chart with another clean earnings beat and guidance that keeps the current setup intact.
