Coverage of Toast (TOST) was initiated at a sell side-firm the other day with an Outperform rating. Let's check out this company that combines point-of-sale services, payment processing, and loyalty programs.
In this daily bar chart of TOST, below, we can see that prices declined from early November. Prices appear to be attracting some buying interest in the $20-$15 area. TOST is trading below the declining 20-day and 50-day moving average lines. Trading volume has begun to pick up from the middle of January and suggests that prices are in an area that investors find attractive.
The On-Balance-Volume (OBV) line is now steady after a decline into February. This could signal a shift from aggressive selling to aggressive buying. The 12-day price momentum study has higher lows from November telling us that the pace of the decline has been slowing down. The movement of the indicator versus the price action is a bullish divergence and can foreshadow a price increase in the weeks ahead.
In this weekly Japanese candlestick chart of TOST, below, we can see three recent doji patterns telling us that buyers and sellers are in balance as there is no real body. The OBV line is still pointed down but momentum is improving. A bullish candle is needed to give confirmation to the doji marking a bottom reversal. Stand by.
In this daily Point and Figure chart of TOST, below, we can see a potential downside price target of $4. A trade at $21 should improve the picture.
Bottom line strategy: The charts of TOST are appealing. I would recommend purchase if I saw a bit more price action and a strong close on increased volume above $21 along with a bullish weekly candle.
