Brokerage Bets

09/19/2003 12:00 am EST

Focus:

Two of the very best traders around are currently suggesting bets on brokerage stocks. Bryan Perry, editor of The Tactical Trader, suggests AmeriTrade. Meanwhile Bernie Schaeffer, editor of The Option Advisor and chairman of Schaeffer Investment Research, is bullish on Schwab. Here are their reviews. (For more information on the advisors below, please click on their photos.)

Perry, Bryan"Our year-end targets call for a move up for the Dow to 10,000, a rise in the Nasdaq to 2,000 and a gain in the S&P 500 to 1,100," notes Bryan Perry. Meanwhile, in a review of his current portfolio recommendations, Perry says, "AmeriTrade (AMTD NASDAQ) announced they had opened 27,000 new accounts for August, crossed the 3 million account threshold for the first time, and that September trading activity was running 30% ahead of August figures. Money flow going into AMTD is off the chart. We paid up for this name due to the fact that the stock was breaking out of a channel at $11. Our entry point was $12.26 and after nine days of sideways action, the stock is hitting a new 52-week high as of this writing, trading just above $12.70 per share and on the way to our price target of $15."

Schaeffer, Bernie Meanwhile, the latest featured stock from Bernie Schaeffer is Charles Schwab (SCH NYSE). "Schwab revealed that total client assets rose 2% versus July. The company also noted that it sees 'heightened investor engagement.' From a sentiment perspective, pessimism on the stock is near extremes. Its short-interest ratio surged 21% during the most recent reporting period to 6.21 days to cover, which could spark a covering rally should the recent strength continue. Wall Street also maintains a decidedly negative view with respect to the stock. According to Zacks, seven analysts rate the stock a 'sell,' while seven rate it a 'hold,' and only one rates it a 'buy.' Future upgrades from this pessimistic bunch could provide a boost for the security. Technically speaking, the equity is currently trading above potential support at the site of its 10-day and 20-day moving averages. Traders should target a move up to 13.23 with a stop-loss set for a trade below 11.50."

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