3 Charts For Investors to Watch Friday: DocuSign, Hertz Global, Morgan Stanley

Here's our daily look at three charts connected to recent news-driven price moves, with important technical levels to watch.

DocuSign, Inc.

Shares in DocuSign (DOCU) jumped over 9% on Thursday after Reuters reported that Bain Capital and Hellman & Friedman are considering acquiring the electronic signature and digital transactions company. People familiar with the discussions said the two private equity firms were among the final bidders for the company, indicating that the potential deal is set to be one of this year’s biggest leveraged buyouts (LBOs). A deal could be agreed upon in the coming weeks, with both funding firms possibly working together to close a potential transaction, the sources said. They added that alternative asset management firm Blackstone Inc. (BX) held discussions with DocuSign about a possible deal but have since pulled out of the race for the $12.5 billion company.

DOCU broke above a descending channel in early December and has continue to trend mostly higher since. Moreover, the 50-day moving average sits poised to cross above the 200-day moving average today and generate a golden cross, a chart pattern that often marks the start of a new uptrend. Investors should closely watch the $68 level—an area on the chart where the price may run into resistance from the February 2023 swing high.

Hertz Global Holdings, Inc. 

Car rental company Hertz Global (HTZ) skidded 4.3% Thursday after it disclosed in a regulatory filing that it’s reducing its electric vehicle (EV) fleet due to softening demand and higher repair costs. The company plans to sell around 20,000 EVs and use the proceeds to purchase traditional fuel-powered cars. The sales will result in a $245 million net depreciation expense and be completed by 2025, Hertz said. The decision comes two years after the car rental giant forged a partnership with electric car maker Tesla (TSLA) to buy 100,000 of its vehicles as part of a broader effort to electrify its rental fleet. Hertz had initially planned to electrify 25% of its entire fleet by this year and was part of the Corporate Electric Vehicle Alliance that aimed to purchase of at least 330,000 EVs before 2027.

HTZ has trended lower since an ominous death cross pattern appeared on the chart in late September. Furthermore, a recent countertrend rally appears to be breaking down, with the stock’s price closing below the 50-day moving average on Thursday. If the stock continues to fall, keep an eye on how the price reacts near last year’s lows around $820. A volume-backed breakdown could see the downtrend continue, while a bounce could mark the beginning of a potential double bottom formation.

Morgan Stanley

Morgan Stanley (MS) shares slipped 1.1% Thursday after Bloomberg reported that the investment bank is close to settling a government probe into several market-moving stock sales it executed. People close to the discussions said that although the parties had not yet finalized some specific details, the bank will pay a penalty of between $200 million and $300 million, forming part of a resolution that is expected to avoid criminal charges being leveled at the bank. The probe specifically relates to whether Morgan Stanley violated rules against trading with material non-public information or front-running their clients when executing block trades, which are large privately negotiated securities transactions between bankers to minimize price impact. The Wall Street firm first disclosed in May last year that it was working with federal prosecutors and regulators to resolve the issue.

Since bottoming out below $70 in the fourth quarter of last year, MS has staged a sharp recovery to now trade above both the 50- and 200-day moving averages. Although the price broke below a pennant in Thursday’s trading session—a chart pattern that typically indications condition in the current direction of the trend—it may find support around the $88.50 level from a trendline connecting the February and July swing highs. However, longer-term upside may run into overhead resistance near the 2023 high, which sits just above the psychological $100 area.

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As of the date this article was written, the author does not own any of the above securities.