Time To Bet On A Rally From TD Ameritrade Stock

AMTD recently fell near its historically bullish 200-day trendline

It's been a rough few days for TD Ameritrade Holding Corp. (NASDAQ:AMTD), which is down nearly 3.4% so far this week, on newsthat JPMorgan Chase (JPM) will launch a free trading app next week called You Invest. However, the brokerage stock is now trading near a trendline that's had bullish implications in the past -- suggesting AMTD shares could be ready to bounce.

Specifically, AMTD stock is now trading within one standard deviation of its 200-day moving average. According to Schaeffer's Senior Quantitative Analyst Rocky White, there have been five other times since 2015 that TD Ameritrade has pulled back to this trendline after a lengthy stint above it, resulting in an average one-month return of 4.50%, with 75% of the returns positive.

Based on its current perch at $57.52, up 1% today, the stock would be back atop the $60 level if similar move took place this time around. Looking at the charts, AMTD shares raced to a record high of $63 back in March, but since then have churned below the $61 level. Nevertheless, the equity boasts a year-to-date lead of 12%, and has gained 32.7% year-over-year.

Digging into options, near-term traders have been more put-heavy than usual toward TD Ameritrade stock. This is per the equity's Schaeffer's put/call open interest ratio (SOIR) of 1.52, which ranks in the 80th percentile of its annual range. An unwinding of skepticism in the options pits could create more tailwinds for the equity.

Those wanting to bet on a repeat of history for AMTD stock may want to consider an options buying strategy. This is per the security's Schaeffer's Volatility Index (SVI) of 24%, which ranks in the low 20th percentile of its annual range. In other words, muted volatility expectations have been priced into short-term AMTD options -- a boon to potential buyers.