Techie Tuesdays: Toronto-Dominion Bank

This is the fifth installment of Techie Tuesdays.  So far we have looked at Exxon Mobil, Starbucks, and J.P. Morgan Chase and Medco Health Solutions.  Today we will examine Toronto-Dominion Bank.

Toronto-Dominion Bank (Ticker: TD), known in short as TD, is a Toronto, Canada based company that provides financial services in North America.  TD has over 58,000 employees and in 2007, the bank brought in $26.47 billion in revenues.

TD’s stock has lost 53.2 percent of its value in the past year, which is worse than the S&P 500 (39.9 percent) in the same period.  (Data from Yahoo Finance)

So is TD a bargain or a bummer?  Yesterday, TD Bank closed at $32.75.  Let’s see what the technical indicators reveal about TD.

Today we’ll use the Moving Average Convergence Divergence (MACD).

The MACD uses exponential moving averages from three periods: 9, 12 and 26 days to form two lines. One line plots the difference between the 26 and 12-day EMAs, the other line is the 9-day exponential moving average of the MACD and serves as a trigger line.  Both lines are tracked against a center line (which equals zero). There are a few ways to use the MACD, here are the signals:

Bullish – Positive divergence (26 day EMA minus 12 day EMA is greater than zero), bullish moving average crossover (the MACD line crosses above the 9 day EMA of the MACD), and the bullish center line crossover (the MACD line crosses above zero).

Bearish - Negative divergence (26 day EMA minus 12 day EMA is less than zero), bearish moving average crossover (the MACD line crosses below the 9 day EMA of the MACD), and the bearish center line crossover (the MACD line crosses below zero).

The chart is rather large, so I had to use a link this week. Click here to view the Yahoo chart for TD Bank and let’s take a look at TD’s MACD data as of 12/15/08.

MACD (26-day minus 12-day EMA): -2.89

9-day EMA of the MACD: -3.24

Divergence (MACD minus 9-day EMA of the MACD): 0.35

The MACD signs appear to be bullish.  As of 12/15/08, TD has positive divergence. Upon examining the crossovers on the chart we can see that on 12/8, the MACD line crossed over the 9-day EMA, but both the MACD and the EMA remain below zero.

TST’s Techie Tuesday Recommendation: BUY