Thursday, September 3, 2009

TRAD: Call Buyers Step In

TradeStation Group, Inc. (TRAD) is an online broker-dealer. On Wednesday, the company reported that customer trading volume declined again in August. However, bullish call buying was observed the same day, particularly in the December $7.50 issue where a block of 1,000 calls traded apparently at the ask. TRAD closed at $7.00 on Wednesday.

There are a couple of reasons to like TRAD here: First of all is the very recent trading activity, rumors, and news from other broker dealers such as ETFC and IBKR. Secondly, from the chart below, we see support and the 200 DMA both at around $6.85.

I was hoping to take a long position on a dip to support this morning, but that didn't happen.

Update (Sept 8th): I was able to pick up some TRAD at $6.95 afterhours today. The 200 day SMA is $6.93. TRAD has been testing $7 support for four days now. Stochastics are pointing up and TRAD had a positive MACD crossover today (not shown in chart). I'll have a stop just below the $6.85 support should that level fail.

TRAD Trading History:
September 8th, bought TRAD for $6.95
September 17th, sold TRAD for $7.53 (+$0.58, +8.3%)
Current position: None

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