On Tuesday, a sell-side firm lowered their revenue estimates for 2022 and 2023 for a number of companies, including The Trade Desk ( TTD) . Let's check out the charts and indicators to see if this "news" has already been discounted by the price action.
In the daily bar chart of TTD, below, we can see that the shares have tumbled lower since November. We found the charts attractive in February but that recommendation did not work out. Today prices are down and this is a retest of the early May low, in my opinion. Prices are trading below the declining 50-day moving average line and below the bearish 200-day moving average line.
The On-Balance-Volume (OBV) line shows only modest weakness from November. The 12-day price momentum study shows a low in March and a higher low in May for a bullish divergence. The pace of the decline has slowed in the past three months and that is a positive development.
In this weekly Japanese candlestick chart of TTD, below, we can see a large hammer pattern in early May. The next two candles are close to being dojis so we really need to see some bullish confirmation with a white real body.
The weekly OBV line shows a long rising trend and is more positive looking than the daily chart. The 12-week price momentum study shows equal lows when prices made lower lows -- a bullish divergence.
In this daily Point and Figure chart of TTD, below, we can see a downside price target of $45, which is being tested this Tuesday morning.
In this weekly Point and Figure chart of TTD, below, we can see a potential downside price target in the $18 area. This is possible but prices will need to make a new low for the move down to "refresh" the downtrend.
Bottom-line strategy: TTD is being pressured in early trading Tuesday but that may not last and I would expect prices to improve and the early May low to hold. Aggressive traders could begin to probe the long side of TTD later in the afternoon Tuesday risking to $36.
