Morgan Stanley flashes 'full house' equity buy alert

Indicators forecasting V-shaped recovery

Morgan Stanley has issued a "full house" alert to buy global stocks for the first time since 2009, after five of its key market signals indicated the bottom of the recent equity slump.

The Telegraph reports this is a rare occurrence, which typically leads to a V-shaped recovery, with a 23% gain for share prices over the next year. Its five major signals include valuation, fundamentals, risk, capitulation, and a combined market indicator. The investment bank then uses these indicators to capture mutual fund flows, market breadth and technical momentum measures in order to spot the best time to buy. All five of these indicators are currently flashing a 'buy' signal. Morgan Stanley has had previous success with this measure, as it managed to call the top of the Europea...