Traders Target Retail Brokerages as Quarter Ends

If there a better gauge of the confidence in the “little guy/gal trader” than strength in stocks like TD Ameritrade (NYSE: AMTD), E*Trade Financial (NASDAQ: ETFC) and Charles Schwab (NASDAQ: SCHW)?

All three of these brokerage stocks are only recently trading above their 200-day moving averages. But each did so in potentially significantly different ways. TD Ameritrade crossed this rubicon in early February. Talk to Chuck and he’ll tell you that his shares broke into bull market territory at the end of February. E-*Trade – wisecracking baby and all – have only been back above their 200-day moving average for a few weeks.

So it may not be surprising to find that in the recent selling that took all three stocks lower and to the brink of technically oversold territory, the one stock that is so far already moving higher is TD Ameritrade. Shares of AMTD gained more than 1% in Friday’s session after a three-day slide to new, two-week lows.

Is this good news for E*Trade Financial and Charles Schwab? There’s no doubting that both ETFC and SCHW are near levels where traders have been more likely to buy than sell in recent history. ETFC pulled back for three days in a row heading into Friday’s session, closing outside of technically oversold territory, but retreating to new, short-term lows. Shares of SCHW did finish oversold on Thursday’s session, and traded higher by more than half a percent on Friday. Both E*Trade and Charles Schwab have significant short-term edges of just under three quarters of a percent.

Another interesting potential opportunity and play on the retail trader is the pullback in shares of FXCM Inc. (NASDAQ: FXCM). A forex brokerage that has grown significantly in recent years, FXCM’s stock has been moving lower in the wake of a rally its highest level in nearly five months. Down more than 1% and trading lower for a fourth day in a row on Friday, FXCM is trading just inside technically oversold territory above its 200-day moving average. The stock has a positive edge of more than three-quarters of a percent in the short-term.

We’re happy to announce that Bloomberg Financial has released How Markets Really Work: A Quantitative Guide to Stock Market Behavior, 2nd Edition by Larry Connors and Cesar Alvarez.

Click here to learn more.

David Penn is Editor in Chief of