Morgan Stanley - A Contra Play

Presented below is a chart of MS 0.00%↑ relative to the financials sector ETF XLF 0.00%↑ . An outperformer since 2020, one would think this trend continues given MS 0.00%↑ comparatively lower exposure to many of the headline risks currently being discussed about other, more consumer facing banks. But the momentum appears to be slowing, and what if that’s a sign that perhaps the concerns at those other banks are not as worrisome as is being headlined?

The XLF 0.00%↑ is at a critical juncture here near $32. I don’t know whether it breaks or not, but my hunch is that if it doesn’t, the upside alpha will come from names like WFC 0.00%↑ , BAC 0.00%↑ , SCHW 0.00%↑ and other similarly sold off financials.