TTD Rallies on OpenAI Partnership Talks, Stock Still 80% Below Record High

0:00Welcome back to Market on Clothes, shares of the trade desk rallying today after report from the information said that OpenAI has had discussions with the company to help it sell advertising. This comes after OpenAI announced last week it had raised $110 billion in its latest funding round with $50 billion from Amazon and $30 billion each from Nvidia and Softbank. OpenAI is projecting revenue for 2030 to be more than $280 billion. But it is time for options corner joining us, Rick Ducat, our lead market technician here to help us take a closer look at the trade desk. And this massive move to the upside that we're seeing today, you know, they've been up close to 20 percent through most of the day on this news here. But as we look at the trade desk, you know, against, I don't know that I want to call them competitors. I would say maybe meta in here, an alphabet in the space app, love in. But how does it stack up? So these are companies that are present in the digital advertising space, kind of a niche category here. That's what the trade desk does. Is there a platform where companies can bid on and buy ad space in real time?

1:04And they haven't been doing very well lately. As you can see here, they're the worst performer out of this little window into this sector. Companies seem to be cutting back on ad spending due to economic uncertainty. And, you know, look who the competition is. As you said, Marley, the likes of Google, meta, Amazon, not exactly a lightweight to square off against here. So a sector that has seen some major disruption seemingly lately from the advent of not only what effect AI could have on this, but just general economic conditions as well. So now we're in a situation today where we don't really have a lot of details about what's going on so far. It's not even really clear what services of the trade desk that open it even wants to use so far. So we'll have to kind of follow this one more as it goes. Yeah, certainly. And I want to highlight before you make this chart disappear. This is the trade desk in case anyone was missing. It is this lower purple, not included in the bunching of the group. But like you said, this is just a report. This is a report of early discussions. The report also notes that open AI does plan to move its advertising in house, kind of

2:07similar to meta did, but meta used Microsoft initially with its ads. So it looks like that sort of the framework that they may be following here if these talks do actually turn out to be accurate. But as we look at the technical setup for the trade desk, knowing their revenue has been falling off, they've seen decreased ads spend, particularly across the auto sector really hurting them. But I see a downward sloping channel here, either prior to the move to the upside today. It wasn't even a year ago that the trade desk was kind of like the darling of the market. We saw highs 91, 45 and then a very quick turnaround is can be the case and stock the stock market game here. It can be a situation where things get upturned very quickly here. Now we can see this old low point here, another subsequent low and a breakdown point. We never really recaptured that 43 level. So now the horizontal levels to watch include 41, 37 and around 29, 50 or so. So we had another small gap here that's been filled near about 23, 78, but we did make

3:10some lows after that in terms of our intraday levels. But as you said, a downward channel between our two white dash or white solid lines here. Now though we have broken above that area, we are hanging on above this gap that we highlighted here near 29, 50. So an interesting development to be sure. When we do look at our moving averages that we follow, our gold 63 day quarterly EMA comes in at 32, 50 roughly. So that seems to be a stopping point so far today. We've backed off a little bit from that point. We also have a confluence here, our two shorter term, five day and 21 day EMAs in dark blue and teal respectively, both come in just below 27. So that gives us another confluence point to watch out for potential support, RSI, big turnaround here out of the oversold area above the 50 midline, making new relative highs along with price here. So start to look for any kind of mismatch between momentum and price activity for a clue of a slowdown or perhaps a give back and retreat to prior supportive levels.

4:15Our volume profile shows that the heavy trading areas come in here right around 24, 50 to 28 roughly, another smaller pocket here near about 30. But really 36 to 40 is a much more notable area only rivaled by the area that includes the point of control, the heaviest trading area of all, around 53. Notice that we can see volume spikes happening recently too on some of this news here. So heavy volume often signals high conviction on the part of traders. Yeah, and you mentioned a lot of those levels, especially at the point of control, our heaviest trading volume, you know, significantly above where we are today, just under $30, even with that move that we saw to the upside today still down, I think more than 50% in the last year. But as we look at the options actually already highlighted, we saw a pretty significant uptick in volume. What did the sizzle look like today? The sizzle came in quite heavy, 6.4 times the 5-day moving average of volume here. That equates to about a little over 300,000 options total, changing hands today. So quite heavy for this particular name, the most open interest.

5:18Actually is in the January 15th, 2027 contract here, about 24%, but the second open interest is our March monthly expiration here, our orange box, looking for about a plus or minus 13% move over the next 15 days. Interesting trade I saw. We did see a trader buying the March 13th, 23 and a half calls, 2,000 of them for about a 768 debit here. Unfortunately, it looks like this was actually a closing trade here. So just kind of back of napkin math, it looked like the opening trades were on February 26th and 27. They received a $1.25 credit. They sold at $7.68, so that's about a $1.25 million loss, kind of figuring even conservatively here. So it could be quite a bit worse than that. Yes, I certainly could be with that one, but Rick, thanks for highlighting that uptick in the volume we saw today on the options action for the trade desk and also flagging that unique trade for us.