Benzinga - On Tuesday evening, Benzinga asked its followers on Twitter what stock they’re watching.
Benzinga selected one ticker from the replies for technical analysis.
@ftr_investors and @miguela02136831 are watching The Trade Desk, Inc (NASDAQ: TTD), which was surging over 28% after printing fourth-quarter earnings.
Trade Desk reported earnings per share of 38 cents on revenues of $490.7 million, marginally beating the consensus of EPS of 36 cents and revenues of $490.5 million. The company also said its board has approved a share buyback of $700 million and announced guidance for the first quarter that came in above consensus estimates.
The surge higher caused Trade Desk to break up bullishly from a long-term descending trendline, that had been pressuring the stock lower since Nov. 17, 2021, when Trade Desk reached an all-time high of $114.09.
A descending trendline acts as a resistance level and indicates there are more sellers than buyers even though the price continues to fall. In order for a trendline to be considered valid, the stock or crypto must touch the line on at least three occasions. After that, the more times the trendline is touched the weaker it becomes.
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The Trade Desk Chart: After temporarily breaking up from the descending trendline on Feb. 3, which formed a bull trap, Trade Desk fell back under the area and spent the subsequent five trading days attempting to break bullishly from the trendline. On Wednesday, Trade Desk broke up from the trendline again and received bullish momentum, which indicates a longer-term reversal may be in the cards.
- The break jup from the trendline also caused Trade desk to regain the 200-day simple moving average (SMA) as support. The 200-day SMA is an important bellwether indicator and when a stock is trading above that area, it’s considered to be in a bull cycle.
- The gap left below will likely concern some bullish traders, combined with the massive spike higher. When a stock moves in one direction too quickly, there is always concern that it will retrace just as quickly. Conservative traders would like to see Trade Desk eventually fall to close the lower gap.
- If Trade Desk closes the trading day near its high-of-day price, the stock will print a bullish kicker candlestick, which could indicate higher prices will come again on Thursday. The second most likely scenario is that the stock will begin to trade sideways on decreasing volume, and settle into an inside bar pattern.
- If Trade Desk runs into sellers who cause the stock to close the session with an upper wick, it could indicate lower prices will come on Thursday. A retracement is likely to come over the next few days because the stock’s relative strength index is measuring in overbought territory at about 72%.
- Trade Desk has resistance above at $66 and $73.11 and support below at $59.60 and $51.18.
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