Home > Chart Talk > $Time To Buy E*Trade?

$Time To Buy E*Trade?

E-Trade (ETFC) was up 9% today as talk of a possible takeover candidate. These rumors have swirled and swirled again. Each and every time, there is no substance behind the rumor. This time it may be different!  Earlier in the day, E Trade reported October trading volumes for it’s customers, which came in a bit light. However, the latest report showed that they had reduced its bank-related deposit assets. A major reason for the decline in the stock over the last 2 years.

In addition, TD Ameritrade CEO Fred Tomczyk made some comments about a possible M & A activity in the future at a Reuters conference. He said that and acquisition was :the best use” for TD Ameritrade’s (AMTD) considerable cash position. There have been some talk that the buyout price could be as high as $4.

Technically the stock looks pretty good. Currently trading at $1.69, it traded as high as $2.07 in late September.  After the surge today, it closed above the 50 day EMA at $1.66.  Earlier in the month, it crossed back over the 200 EMA. Risk-Reward, we feel this is one to own!  It may take time to play out, but your downside is limited, your upside looks pretty good.

 

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  1. December 9, 2009 at 3:36 am

    Agree with this analysis, mort of etrades problems appears to be behind it, fundamentals improving . Good risk to reward. Price become very interesting if you apply a costs of what it would cost a brokerage business to build etrades customer base from scratch.

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