TD Ameritrade - AMTD

Entry: $34

Target: #1 $37, #2 $39-40 but this could offer a significant long term entry point as well. For now it’s just a max oversold, over-reaction trade.

CLOSED 10/15/19: With Schwab earnings performing well, I’ll take the opportunity to sell AMTD into the pop to $37. Business conditions will be more difficult going forward and the 10YR yield is hitting resistance. I’m not convinced we have seen the last of slow economic data so rates could fall again on the next batch of slow data.

Gain: 5.8%



I do not understand this race-to-zero philosophy all these online brokerages are engaged in and after the pounding all of the stocks took, AMTD in particular on the FREE commissions announcements, but this smash in AMTD appears very overdone. I do not like the precedent they are setting along with Schwab but as a manager of SMA’s for clients, I love the reduction in transaction costs they just got. So I don’t like the long-term implications but from a trading perspective I think there’s $3 of easy money higher for a trade. Let’s assess once we see the strength of this oversold bounce.

Capitulation trades are one of my favorites. AMTD trades around 3.6m shares per day and on October 1 it traded >45m shares with high but lower amounts over the next few days so sellers look like they’ve exhausted themselves so I like this entry under $34.