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Here's What Bulls Are Looking For as Trade Desk Hits All-Time Highs

The Trade Desk stock is surging higher on better-than-expected earnings. Here's how to trade it back to all-time highs.

The Trade Desk  (TTD) - Get Trade Desk, Inc. Class A Report is trading incredibly well on Monday, up 30% on better-than-expected earnings.

What a move it’s turning out to be, as shares flirted with a fade early in the session.

The company reported a top- and bottom-line beat for the third quarter and provided strong guidance for the fourth quarter.

The move helped ignite a monstrous rally in the stock, which is now closing in on its third quarter high at $90.

It’s one of the few growth stocks that are actually trading well right now, even though it looked a bit rocky ahead of Monday morning’s report.

Roku  (ROKU) - Get Roku, Inc. Class A Report, Snap  (SNAP) - Get Snap, Inc. Class A Report and other growth- and ad-related stocks have struggled in recent months and earnings weren’t enough to fix the situation.

With The Trade Desk outperforming, how high can the stock go?

Trading The Trade Desk

Daily chart of The Trade Desk

Daily chart of The Trade Desk

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Just look at how quickly The Trade Desk was breaking down before earnings. While the market is grinding out new highs, shares shed 10.75% in the two sessions leading up to earnings.

With back-to-back losses in excess of 5%, confidence was clearly low.

At the open, the stock gaped above the October low, dipped below that mark and reversed higher.

It’s now trading into a recent downtrend mark (blue line) and approaching the third-quarter high at $90. What bulls want to see is simple. 

First, they don’t want to see the stock give up too much of its gains after such a powerful post-earnings rally. Second, they want the stock to give them a quarter-up rotation by clearing $90.

If The Trade Desk can do that, it technically puts the February high on the table near $92. But that’s not where traders’ attention will be. Instead, they will be looking at the first-quarter and all-time high up near $97.

In other words, if the stock can get above the $90 level — and more importantly, stay above — it will have investors eyeing a breakout over the $97 to $100 area.

If we do see a fade from current levels, it will likely take some time for the short-term moving averages to catch up. In that regard, the charts would still look fine as long as the stock can hold up over the October high near $83.