We're locking in profits in a contested stock now that the market is overbought

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Morgan Stanley,NASDAQ Composite,S&P 500 Index

The sale comes after our trusted momentum indicator entered into overbought territory.

Shortly after the opening bell, we will be selling 100 shares of Morgan Stanley at roughly $100.85. Following the trade, Jim Cramer's Charitable Trust will own 1,000 shares of MS, decreasing its weighting to 3.06% from 3.35%.

5 — and is only trading about $5 off its highs despite concerns about a full valuation. That's what Wells Fargo analyst Mike Mayo argued on Aug. 1 after he downgraded Morgan Stanley to a sell-equivalent rating when the stock traded at $101. We disagree with the call, in part because the stock's hefty 3.6% dividend yield and buyback provide a floor of support. But we also don't want to completely ignore it. We'll realize a gain of about 11% on stock purchased in 2021.

 

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