• Chart of the Day: The Charles Schwab Corporation (SCHW)

    by  • July 19, 2013 11:30 am • Charts to Watch, Quick Hits, Tony Venosa's Chart of the Day • 0 Comments

    Today’s chart is of The Charles Schwab Corporation (SCHW) which provides securities brokerage, banking, money management, and financial advisory services to individuals and institutional clients. The company operates through two segments, Investor Services and Institutional Services.

    Ticker:  The Charles Schwab Corporation (SCHW)

    Recommendation: Long

    What I Am Looking At:

    • Shares are greatly outperforming the broader indices as well as the Amex Broker Dealer Index ($XBD), up more than 51 percent year-to-date
    • Round-number $20 level  has been successfully surpassed in June, which had been a major resistance level during the past several years
    • The 50 percent and $20 levels could be supportive in the near-term
    • Shares currently bouncing from the ascending 40-day moving average and breaking up through a bull flag formation
    • Recently reported earnings on 7/16 with a beat on revenues
    • Potential roadblock at the $23 level as peak call open interest for the August series resides at the 23-strike
    • As for today I expect shares to stay above $21 as there are an enormous amount of puts at this strike about to expire worthless today
    • Since February 2012 short interest has grown over 85 percent as shares have increased 80 percent
    • Analysts continue to dislike SCHW as 12 out of 16 rate the shares a “hold” or worse
    • Put buying has been near an extreme during the past 10 days, which could be supportive for shares in the near-term

    Strategy:  Buy with a stop under $20, targeting $25

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    Tony Venosa, CMT is a Senior Options Strategist and works on the trading desk at Schaeffer’s Investment Research. He joined Schaeffer’s in 2010. He has worked in the finance industry for over 15 years. He began his career as a trading assistant in Chicago on the floor of the Chicago Mercantile Exchange. He later moved upstairs and worked as a commodities broker on both the retail and hedging side. He left the brokerage industry to begin his trading career as a proprietary equities trader at a Chicago firm. In 2000, Tony moved backed to his hometown and continued trading his personal account. He later went on to earn his Chartered Market Technician designation. He earned a B.S. in Finance from Miami University. Tony’s main focus is short-term directional option trading.


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