Trade Desk Drops 4.4% Amid Bearish Technical Signals After Failed $90 Break

The Trade Desk (TTD) declined 4.44% during the latest session, closing at $84.53 on elevated volume exceeding 10.4 million shares. This retreat occurred within the context of a volatile multi-month uptrend following a significant rally initiated in mid-April. Below is a technical analysis based on the provided data.
Candlestick Theory
Recent price action reveals bearish signals near resistance. The July 28th session formed a solid green candle closing near its high ($88.46), suggesting bullish continuation. However, the subsequent day (July 29th) printed a prominent red candle closing near its low ($84.53), forming a bearish engulfing pattern that rejected the psychological $90 level. This pattern signals exhaustion after an advance. Key support lies near the $80 psychological level, which held during pullbacks in late June and mid-July. Resistance is clearly established around $88-$89, coinciding with recent highs and the rejection point. The failure to sustain above this zone suggests persistent selling pressure.
Moving Average Theory
The 50-day MA exhibits choppiness, reflecting recent volatility, while the 200-day MA maintains a positive slope, indicating an underlying long-term uptrend. The current price ($84.53) trades below the 50-day MA and the prior calculated 100-day MA, suggesting short-term bearish momentum. However, it remains positioned above the rising 200-day MA, implying the primary uptrend is still intact unless a sustained break below occurs. This configuration often signals a corrective phase within a broader bull market, requiring confirmation from other indicators.
MACD & KDJ Indicators
MACD (typically calculated with 12,26,9 periods) appears to be weakening. Following the July 15th surge, MACD likely generated a bearish crossover (signal line crossing above MACD) as prices retreated from the $89.13 peak. This divergence suggests waning bullish momentum and growing downside potential. Concurrently, the KDJ oscillator (commonly 9,3,3) showed overbought levels (K or D above 80) around the July 15th and 28th peaks. The subsequent rapid decline has likely pushed K and D lines sharply lower, potentially into oversold territory (below 20), signaling increased potential for a short-term oversold bounce, though the bearish MACD crossover provides a counter signal.
Bollinger Bands
Volatility, as measured by the distance between the upper and lower Bollinger Bands (typically 20-day, 2 standard deviations), contracted notably in the weeks preceding the late July peak, indicating a period of relative stability and compression. The July 15th breakout above $80 occurred on a massive volume surge, coinciding with band expansion – a confirmation of the directional move. Price touched the upper band during the July 15th and 28th peaks. The sharp decline on July 29th saw price plunge below the lower band, often an indication of an oversold condition that can precede a short-term bounce or consolidation. The breach requires monitoring for potential reversion toward the midline.
Volume-Price Relationship
Volume signals provide key validation. The most significant bullish volume surge occurred on July 17th (over 111 million shares, far exceeding average) during a breakout above previous resistance near $80, confirming strong conviction behind that leg of the advance. Subsequent rallies on July 23rd and 28th occurred on comparatively lower volume, signaling less enthusiastic buying during the push towards $89. The bearish reversal on July 29th, however, materialized on the highest volume since July 17th. This elevated volume on a down day underscores significant selling pressure and distribution near resistance. This high-volume rejection strengthens the bearish candlestick signal.
Relative Strength Index (RSI)
RSI (typically 14-period) dynamics suggest shifting momentum. RSI likely peaked near or into overbought territory (>70) around July 15th ($89.13) and again near July 28th ($88.65), coinciding with price peaks and exhibiting bearish divergence (price made a higher high while RSI made a lower high). This divergence warned of weakening upward momentum despite price making fresh highs. The subsequent sharp decline has pulled RSI down significantly. An RSI reading around 42 (implied from the magnitude of the drop) is neutral but trending downward, reflecting the current loss of momentum. While not oversold yet, the rapid descent increases the likelihood of RSI dipping towards the 30 zone soon. This serves as a warning sign that momentum is bearish, not a reversal prediction.
Fibonacci Retracement
Applying Fibonacci retracement to the significant upswing from the June 27th low (~$69.33) to the July 29th high ($89.13) yields key levels. The immediate pullback found minor support near the 23.6% retracement level (~$83.80) but breached it meaningfully on high volume on the day analyzed. The next significant technical support converges near the 38.2% retracement level (~$81.25) and the 50% retracement level (~$79.25). Crucially, the strong $80-$82 zone (psychological $80 + prior support & resistance) aligns closely with this Fibonacci band, forming a critical support confluence area. This zone must hold to prevent a deeper correction towards the 61.8% retracement (~$77.25).
Confluence & Divergence Notes
Significant confluence exists around the $80-$82 support zone, bolstered by the psychologically important $80 level, prior swing lows/highs, and the 38.2% to 50% Fibonacci retracements. A decisive breach below this confluence area on continued high volume would be strongly bearish for the near term. The most notable bearish divergence emerged before the July 29th drop: price made marginal new highs near $89 while volume on the rise noticeably lagged the July 15th surge, and RSI formed a lower high, collectively signaling diminishing momentum. While KDJ hinted at oversold conditions near term, the decisive bearish volume confirmation and breakdown below key Fibonacci levels currently outweigh this signal, suggesting further downside potential unless the key $80-$82 support zone is reclaimed decisively. Probabilities favor further testing of major support levels before a sustainable upside attempt can resume.