TD Ameritrade: How Does the Stock Look?

Posted Sep 2nd 2010 9:00AM by Steven Mallas
Filed under: Charles Schwab Corp (SCHW), E*TRADE (ETFC)

TD Ameritrade (AMTD), a broker whose competitors include Charles Schwab (SCHW) and E*Trade (ETFC), closed Wednesday's session higher by 2%. The final quote came in at $14.93. That's not too far from the 52-week low of $14.53. The twelve-month range is a narrow one, as the 52-week high is $21.30.

Is the stock a trade? An investment? Indeed, you may be thinking that it's time to buy. Some things worry me, however. The one-year chart isn't attractive at all. Well, in one sense it is, because a trader/investor would be buying low at this point.

I'm not sure I'm encouraged by that thought, however. When I saw that the shares had reached a 52-week low, I admit I became intrigued. And I was indeed hoping for a pullback back in January.

Now that the pullback is here, though, I can't say I have the courage to initiate a position. Why? As you can guess, it's the overall market condition.

TheStreet.com quotes an analyst who seems to believe that the brokers could be an interesting idea at the moment. So I may be wrong. But I wouldn't make a move just yet. This is a case where price action and support levels will tell the tale. Wait on the tape a little longer, in my opinion; be patient and consider acting when your gut tells you that no new 52-week lows will be made. Of course, the final decision is yours; make sure you perform adequate due diligence prior to making any move.

Disclosure: I don't own any company mentioned; positions can change without notice.

Tags: AMTD, brokers, Charles Schwab, ETFC, ETrade, featured, SCHW, TD Ameritrade