Toni's Position Trade of the Week - AMTD

TD Ameritrade Hldg. Corp. (AMTD) through its subsidiaries, provides securities brokerage services and technology-based financial services in the United States. The company provides common and preferred stocks, exchange-traded funds, option trades, mutual funds, fixed income, margin lending, and cash management services.

Sector: Financial
Industry: Investment Brokerage - National

AMTD peaked in 1999, going from under $5/share to over $60 in several months. It then spent several years retracing its extreme 6-month spike, rounding off at lows into 2002 with strong buy triggers into mid-2003. After turning higher once again, the stock had two strong waves of upside. The first took place in 2003, followed by a two-wave correction sideways, and then a second rally in 2005.

Since late 2005/beginning of 2006, AMTD has once again fallen into a correction phase. This phase has lasted longer than the one in 2004-2005, but it has formed a nice change of pace within the congestion, particularly since mid-2007. This has created a cup-with-handle on the monthly time frame. The handle has matured nicely and is currently favoring a stronger break higher.

While this breakout began on a daily time frame several weeks ago, it is still at an early stage on the monthly time frame, so I will begin to build a position in this stock. The longer monthly correction, as compared to 2004 into 2005, creates higher odds for a two-wave continuation to mirror the action from early 2003 into late 2005. This places a larger target in the $36.50 zone.

Watch Stocks:
Long: UNM, JNPR, JNJ