Long-term view: looking for an entry on TD Ameritrade

Ameritrade (like the financial sector as a whole) is way down, primarily due to the Fed's July interest rate cut. In my opinion, this has been a big overreaction. Ameritrade posted an earnings beat and upward guidance revision just before the Fed announcement, but the rate cut eclipsed Ameritrade's good news.

Ameritrade has significant support levels around 43 and 38. I will looking for entries at these levels, especially at 38. (I find it's usually best to be greedy and pick lower entry points, because stocks often fall 1-3 support levels further than I expect them to.) Look for MACD of -1.5 as a signal to enter.

Comment:

I forgot to mention that the average analyst price target is about $57 per share, implying 26% upside from the current price.

Comment:

Yesterday we hit -1.5 on the MACD. We didn't quite hit my $43/share entry price target, but we got pretty close. In the last 10 years, we've never had a MACD below -1.76. *If* this pullback follows the pattern of historical volatility in this stock, Ameritrade should bounce upward from here. And I think its strong earnings and guidance upgrade on the Q2 earnings report favor a bounce.

However, there's also a possible downward catalyst: talk of further rate cuts. Morgan Stanley is predicting a 0% interest rate in the near future. Rate cuts are bad for financial stocks like AMTD and could cause a continuation downward to 38.

Comment:

This stock got a *very* nice bounce from the $43 support level.