I was looking to start a position in TD Bank. I was hoping I could get a technical report on TD and possible entry points. Always enjoy reading your analysis.
Thanks for the assignment and your kind words. Both are greatly appreciated. This will be the third time since 2012 that I inspect the details associated with Toronto Dominion Bank (TD TSX). The last time was on January 17, 2014 when the shares were trading for $97.81 pre-split and the dividend produced a yield of 3.51%. Anthony wanted to know if I thought buying the shares was a good idea and if he should wait until the stock split.
It was advised he should treat the split as a market neutral event and that he should take it off the table in making a purchasing decision. The outcome of the research indicated that there was nothing on the charts to suggest a trend reversal and it reaffirmed the accumulation strategy recommended in 2012 when the shares were trading for $78.43 pre-split. On re-examination that was the right call. The shares continued to move higher until September of 2014 where they topped out and broke the uptrend that had supported the leg up that started in June of 2013.
Another study of the charts will help identify where you might consider starting your position.
The three-year chart reveals an established uptrend line that was broken as the stock hit resistance at near $57.00 and gave rise to pullback to support at $50.00. In July of 2014 the MACD and the RSI signalled that the advance was running out of steam and that investors could expect some selling to come into the market. Trading of the shares has been volatile over the last eight months but keep in mind that the 3.81% dividend yield should be part of your final evaluation.
The six-month chart depicts a stock building support at $53.00 and the 50-day moving average. The MACD and the RSI were indicating an oversold situation in January of 2015 when the shares touched $50.00 where they caught a one month run to just over $55.00. Currently the momentum indicators are not suggesting we can expect a move higher in the short run.
TD is part of an oligopoly in Canadian banking that enjoys significant barriers to entry within the domestic market. Management has built a footprint in the United States that could provide a springboard for growth. In the final analysis the charts are not providing me with the same evidence that we can expect a new up leg to start immediately but investors should continue to accumulate this value opportunity.
Next time I will investigate the charts of MannKind Corporation (MNKD NASDAQ) for Serge.
Make it a profitable day and happy capitalism!