I'm Watching This Key Price Level on The Trade Desk

Here's what we're seeing now on TTD.

Jim Cramer told his Mad Money viewers Wednesday night that what's good for Netflix (NFLX) is also good for streaming device maker Roku (ROKU) and for The Trade Desk (TTD) , which provides advertising services for streaming applications. Cramer said that while Roku is pricey at 20 times sales, The Trade Desk is a bargain after the stock's recent pullback.

Let's check out the charts and indicators of The Trade Desk. 

Our last review was back on Oct. 6 where I wrote that "Selling a stock on strength can give you sellers' remorse but when a stock is very overbought and price momentum has been diverging the decision to take profits is not hard. I recommend that traders and yes, even investors, consider booking profits on TTD at the market." TTD declined into early November but then soared to still higher highs into December. Another decline unfolded into early January. 

What do we see now? 

In the daily Japanese candlestick chart of TTD, below, we can see three corrections since October. The most recent pullback/correction has been the deepest so far. Prices declined below the rising 50-day moving average line and have rallied back to the underside of this indicator.

The On-Balance-Volume (OBV) line finally shows weakness from late December telling us that sellers of TTD have become more aggressive. The Moving Average Convergence Divergence (MACD) oscillator crossed below the zero line earlier this month for an outright sell signal. 

 

In the weekly Japanese candlestick chart of TTD, below, we can see a weakening picture. Prices are still extended above the rising 40-week moving average line.

 

The weekly OBV line shows weakness and the increase in more aggressive selling. The MACD oscillator just crossed to the downside for a take profit sell signal. 

 

 

In this daily Point and Figure chart of TTD, below, we can see a potential upside price target but we also see that a trade at $776.10 could weaken the picture.  

 

 

 

Bottom-line strategy: TTD is likely to trade to still higher highs in 2021 but over the next several weeks I still see a risk of lower lows and maybe a retest of the $600 area.

 

Employees of TheStreet are prohibited from trading individual securities.