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Retail investors try to catch bottom in oil: TD Ameritrade

Workers change a drill pipe on the Laurus oil drilling rig operated by Petroleos Mexicans (Pemex) in the Ku-Maloob-Zaap oilfield at Campeche Bay off the coast of Ciudad del Carmen, Mexico.
Susana Gonzalez | Bloomberg | Getty Images
Workers change a drill pipe on the Laurus oil drilling rig operated by Petroleos Mexicans (Pemex) in the Ku-Maloob-Zaap oilfield at Campeche Bay off the coast of Ciudad del Carmen, Mexico.

Small investors loaded up on shares of energy stocks last month amid an epic decline of 40 percent in the price of oil from a recent high in July, according to a monthly proprietary trading report from TD Ameritrade.

Transocean, BP and Halliburton were the favorite stock picks in the sector—and the whole market—among TD's 6 million funded accounts, the report showed.

Read MoreOil prices tumble after Morgan Stanley cuts forecast

They were value investors in other areas as well, scooping up shares of Twitter, Gilead Sciences, Alibaba and GoPro on weakness in November.

"We're seeing clients respond to market moves as if they were professionals—they're remaining engaged and making strategic adjustments where they see pockets of opportunity," said JJ Kinahan, chief strategist at TD Ameritrade.

The energy move by the retail trader is a losing trade so far, as the Energy Select Sector SPDR fell back to near its October low in Monday trading. The industry ETF is in a bear market, down 23 percent from its high for the year in June. The price of WTI oil fell to a new five-year low on Monday below $64 a barrel.

Overall, retail investors stayed bullish on the U.S. stock market in November, but not as bullish as they were in the first quarter of this year and before the major pullback in October. TD's proprietary IMX Index, which unlike other sentiment reports tracks actual buying and selling, rose to 5.11 in November, down from 5.79 in September and an all-time high reading of 5.87 in March.