TD Ameritrade's investor sentiment index rose in November for the second straight month, reaching the second-highest level in its four-year history, as customers of the online stock brokerage added shares of Twitter after its initial public offering.
The Omaha-based company said Monday the Investor Movement Index rose to 5.42 in November from 5.07 in October. The index is high when compared with historic levels, the company said, and the highest since the record set in June 2011.
The reading also followed the positive turn the index had taken in October after a dip in September, the company said. “TD Ameritrade's client equity market exposure increased in part due to net buying activity that included U.S. stock-based mutual funds and exchange-traded funds.”
TD Ameritrade, which employs about 2,000 in Omaha, creates the monthly index by analyzing and averaging the holdings, positions, trades and other data from 6 million customers. The information is then boiled down to an index; a rising index suggests bullish sentiment, a falling one bearish.
TD Ameritrade said customers were net buyers in November of Tesla Motors, Salesforce.com and Cisco Systems. Twitter “was also a popular buy” as customers built positions following the company's Nov. 7 IPO, TD Ameritrade said.
“Our clients are always looking for potential buying opportunities and we have consistently seen our clients purchase names on price dips,” said Nicole Sherrod, managing director of TD Ameritrade's Trader Group. “For example, Tesla, Salesforce and Cisco were volatile in November, and TD Ameritrade clients appear to have treated the price declines as buying opportunities.”
Widely held names included General Electric, Apple, Facebook, Cisco Systems and Microsoft, TD Ameritrade said.
Even though widely held, the company said customers were net sellers of Apple, which “was range-bound most of November after reaching a 10-month high in October.” Others in the sold category included Pfizer, Microsoft and Exxon Mobil, after the oil company's price surged on better-than-expected earnings.