Morgan Stanley shares just did something interesting, and here’s why one trader is buying it

Morgan Stanley's earnings beat Wednesday sent the stock rallying more than 2 percent, but the big bank's run is far from done, according to Rich Ross.

The Evercore ISI technician identified three technical reasons why "[Morgan Stanley] has further upside." Looking at a chart of Morgan Stanley, Ross points out that while the stock has really moved like an "escalator," climbing until March but then losing all of its 2017 gains by the end of the month, it has managed to keep above its 150-day moving average.

This is the first technical reason why Ross believes Morgan Stanley is a buy. The 150-day moving average serves as a key technical indicator for the stock's movement, Ross said on CNBC's "Trading Nation." "It really defines the trend, providing support on the way up and resistance on the way down."

He added: It's making "a critical stand here."

But the 150-day moving average line is also hitting another key level for the stock, which is trading above $42. That line currently sits at around $40, a level that is actually close to the bank's 2016 highs. In Ross' eyes, this further cements $40 as a "support" level.

The fact that Morgan Stanley has managed to stay above this $40 resistance even as it tumbled from 2017 highs leads Ross to round out his third reason for buying the bank. Ross thinks that since the stock is staying above $40, it will likely bounce from there.

"There is still upside to Morgan Stanley; I would be a buyer," he concluded.

Earlier Wednesday, the financial giant reported first-quarter results that beat earnings and revenue expectations.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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