Ameritrade (AMTD) - Get Report began Tuesday's session with a powerful breakout gap following this morning's strong earnings report. As we head into the final hour of the session, the stock is up more than 3% with the help of a nice bump in volume. This impressive move ends a narrow two-week consolidation with an upside resolution. The stock is now set up well for more upside.

AMTD left behind an important bottom during the March through May period. A major support zone near $37.00 held the lows for four straight months, which put in place a solid foundation for a huge rally. By early June, AMTD was back in rally mode and, two weeks later, multiple layers of support had been cleared. As this month began, the surge off the May lows had stretched to 25%.

Ahead of Tuesday's report, AMTD was in consolidation mode while giving back little of the June rally. With the post earnings boost, the stock is set up well for a retest of its all-time highs set back in 1999, near $48.30. As this plays out, patient investors should consider this A- rated stock a buy on weakness.

Nearby support is now in place between last week's high ($45.50) and the June peak near $44.00. On the downside, a close back below $43.00 would indicate more consolidation is ahead before new highs can be reached.

Image placeholder title

View chart in a new Window

This article is commentary by an independent contributor. At the time of publication, the author was long AMTD.