Earnings Season Kicks Off with Strong Bank Performances
The 2025 earnings season is off to a strong begin, with major banks exceeding expectations and providing a lift to the S&P 500 index (US SPX 500 mini on FXOpen) later than last Friday’s decline. Investor optimism that had been building in ahead October was confirmed by robust financial results.
Morgan Stanley (MS) led the gains, reaching a record high above $166 per share following its quarterly report:
→ Revenue climbed to $18.2 billion, an 18% increase year-on-year.
→ Earnings per share (EPS) came in at $2.80, surpassing analyst expectations of $2.10.
Technical Overview of MS Shares
Price movements since summer have created a clear ascending channel (shown in blue), with yesterday’s trading producing a wide bullish gap. The stock moved into the upper half of this channel, breaching the $160 psychological level.
Bullish indicators:
→ The breakout from a bullish flag pattern suggests the uptrend could continue within the channel.
→ The channel median, supported by the $160 level, may act as a key support zone.
Bearish considerations:
→ Intraday swings produced a sharp up-and-down movement, similar to a bearish engulfing pattern, hinting at possible short-term retracement.
→ The minimal and brief break above the previous high signals a potential bull trap.
Additionally, the RSI shows bearish divergence, indicating that:
→ Some long holders may take profits near the record high.
→ Despite strong fundamentals for long-term growth, the stock could face short-term corrections, possibly testing the bullish gap area.
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