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Fan Yang

Morgan Stanley (MS) About to break Below Triangle Consolidation

Bank shares continue to consolidate in 2018. Morgan Stanley $MS remains in consolidation mode with the prospect of more downside. 

MS Daily Chart

(click to enlarge)

Periods of Consolidation;
- We can break down MS price action so far in 2018 into 2 periods of consolidation. 
- The first consolidation resulted in a rounded top.
- Then after price fell below the price top, it consolidated in a triangle.
- As price falls again from triangle resistance to support, we should anticipate a bearish breakout.
Bearish Signs:
- The fact that price respects the previous price top as resistance is the first clue that bears are still in charge.
- Secondly, price has been respecting the moving average cluster as resistance. 
- Finally, the RSI has held under 60 and has been able to push to or below 30. This reflects maintenance of the bearish momentum since the price top.
- The triangle support is therefore vulnerable. Even the low on the year just above $46 is vulnerable. But I think there will be support around the $44 pivot provided the overall market is not in a major correction, in which case we should anticipate downside to $40. 

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