Monday, June 13, 2011

TD Ameritrade Holding Corp. (NASDAQ: AMTD) Q3 2011 Price Target

Recent price: 18.74$
P/E Ratio: 17.95
3 Months Target Price: 22$

Company Description
According to data provided by Reuters, TD Ameritrade Holding Corporation is a provider of securities brokerage services and technology-based financial services to retail investors, traders and independent registered investment advisors (RIAs). The Company provides services through the Internet, a national branch network and relationships with RIAs. The company is under significant influence by Toronto Dominion Bank.

Confidence Margins
Strong resistance $22.90 (+22%)
Light resistance $21.56 (+15%)
Light support $18.55 (-1%)
Strong support $16.73 (-11%)

As many stock brokers, TD Ameritrade is currently undervalued because of low volume on many stock exchanges. This is a play for those seeing an increase in the trading volume in the coming months.

Entry strategy
For the cautious investor:
Buy the stock for 19.50$ or less.

For the risk-taking trader:
The June 2011 19$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 150$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 22$, or keep it until 23$ if you are more bullish in your own analysis.

For the risk-taking trader:
The contracts should be kept until the underlying reaches 22$. This should provide a very interesting return if the underlying reaches the target price as the contracts will get in the money.

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