The Trade Desk, Inc. (TTD) has made quite a splash since coming public in September 2016, doubling in price in a torrid uptrend that ran out of steam in June 2017. Bulls have now returned in force, lifting the stock to an all-time high in the lower $60s. More importantly, it appears that momentum traders are lining up, expecting the top to come off in a trend advance that reaches the triple digits.

The company's self-service cloud-based advertising platform allows buyers to target narrowly defined demographics and then manage their own marketing campaigns across numerous formats, including audio, video, display, native and social media. The similarities to Alphabet Inc.'s (GOOG) Google Ad-Words are obvious, but users are not limited to the monopolistic search engine, which opens up many opportunities for The Trade Desk that are inaccessible to its mega-cap rival. (See also: Google, Facebook Dominate Digital Ads in 2017.)

The Trade Desk beat second quarter earnings per share and revenue estimates in its Aug. 10 report while raising third quarter and fiscal year guidance above aggressive expectations, signaling rapid growth and adaptation that should keep market players interested well into 2018. Its worldwide footprint reduces headwinds generated by the cyclical nature of the advertising business, underpinned by a partnership agreement with China's Baidu, Inc. (BIDU).

The Trade Desk stock opened for public trading at $28.75 on Sept. 21, 2016, rallied briefly to $33.40 and rolled into a downtrend that hit an all-time low at $22.00 in November. The subsequent uptick stalled three points below the post-IPO high a few weeks later, giving way to an ascending triangle pattern that broke to the upside in February 2017. The subsequent buying impulse caught fire, generating a momentum-fueled advance that ended at $46.21 one month later. (For more, see: Trade Desk Beats Q1 Earnings and Revenues, Guides Up.)

The stock sold off to the 50-day exponential moving average (EMA) in March, attracting committed buyers, but it took more than a month for the subsequent bounce to clear that support level. The upside accelerated in mid-May with a six-point gap triggered by an exceptionally strong first quarter earnings report. The stock printed nearly 20 times its average daily volume following the news, signaling investor euphoria often reserved for widely held tech stocks.

The rally topped out just three weeks later in the upper $50s, giving way to another decline into the 50-day EMA. Buying interest developed slowly this time around, generating more than two months of range-bound action ahead of an August breakdown that found support at the opening print of the big May rally day. That decline signaled a selling climax ahead of a strong bounce that broke range resistance on Sept. 11, lifting the stock to an all-time high at $62.86. (See also: Will Trade Desk Continue to Surge Higher?)

A test at that level earlier this week triggered a reversal that has so far held short-term support at $59. Short sellers could drop the price into a test at breakout support between $55 and $56, while the strong rally impulse off the August low allows for a decline to $54 without incurring technical damage. On the flip side, a buying spike toward the mid-$60s could ignite a momentum impulse that adds points at a rapid pace in the fourth quarter.

The next buying catalyst may come on Oct. 4, when the company hosts an Investors Day highlighting global opportunities in the coming year. It is also possible that executives will reveal details about third quarter results at that time, with the venue closely watched by hedge funds and Wall Street analysts that can move the stock with upgrades and under-the-radar buying strategies. Interested market players can access that presentation through a live webcast.

The Bottom Line

The Trade Desk stock is attracting the interest of momentum players after a one-year 100% advance fueled by rapid worldwide growth. It has just broken out of a four-month trading range and could generate a low-risk buying opportunity in the coming weeks. (To learn more, check out: Riding the Momentum Investing Wave.)

<Disclosure: The author held no positions in the aforementioned securities at the time of publication.>

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