Shares of The Trade Desk, Inc. (TTD) tripled in the past year and it is currently pointed up but some divergences and diminishing volume has me cautious and looking to raise stop protection. Maybe that sounds too "technical" so let's check out the charts.
In this daily bar chart of TTD, below, we can see that TTD has left two large upside price gaps in its wake - a breakaway gap in May and a runaway gap in August. Trading volume was heavy on both occasions.
Prices are currently above the rising 50-day moving average line and above the bullish 200-day line. The slower-to-react 200-day line was successfully tested in late December.
Volume looks like it has declined from November but the daily On-Balance-Volume (OBV) line has continued to rise. This rising OBV line suggests that buyers of TTD have been more aggressive but the lack of volume the past five weeks or so is not the picture I would want to see.
The daily Moving Average Convergence Divergence (MACD) oscillator has crossed the zero line a number of times in the past year but it is currently above the line and pointed higher. Though prices are now above the December highs (but below the September peak) price momentum has slowed the past two months or so.
In this weekly bar chart of TTD, below, we see a mixed picture. Prices are above the rising 40-week moving average line as they try to break above the $150-$160 area. Volume has been declining the past three months and that is not the pattern or setup we like to see - rising volume would be what the bulls desire.
The weekly OBV line shows a rise the past two months but it is still below the September high.
The MACD oscillator is crossing to the upside for a fresh outright buy signal.
In this Point and Figure chart of TTD, below, we can see an upside price target of $174 being projected.
Bottom line strategy: Could TTD break out over $160 and head to the Point and Figure target of $174? Sure, but the weakening volume and momentum pattern is making me a nervous long. If you do not have a sell-stop in place I would suggest a $141 sell stop.