FREE Guide: 6 Fibonacci Types that Create the Most Precise Price Levels, Targets, and Reversal Zones

October 18 Chart of the Day - Morgan Stanley

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Third-quarter profits at Morgan Stanley (MS) dropped 9% from a year ago as revenue from investment banking and trading fell.

Investors expressed their disappointment by dropping the company's stock down about 7% earlier today. That puts the stock on track for its largest single-day drop in more than three years.

From a price action technical analysis perspective, whenever price melts through lower time frame levels we find it best to go up in time frame to see the bigger picture.

In this case we went to the monthly chart to help answer the question of where could price be going?  We like to answer this in both directions.

If price continues its downward movement it could be heading for the $68-$70 area before making a decision of whether to continue down or head back up.

Traders can see a bull swing Fib as well as a bull impulse Fib combined with support/resistance and trend that identifies those potential levels of interest to the downside.

Alternatively, a bear validated Fib combined with support/resistance identifies potential levels of interest to the upside.

So what's next? 

We don't make predictions...

Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.

  1. Support/Resistance
  2. Trend
  3. Fibonacci 
  4. Supply/Demand Zones,
  5. Change Control Zones

Take a look at the charts and let us know what you think.  

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