This $TOST chart is looking a lot butter – May 7, 2024
This is Scott with your Chart of the Day. I want to bring your attention back to Toast ( NYSE: TOST ).
About three weeks ago I asked the question, is Toast ( NYSE: TOST ) about to pop? That was right around this area on the chart If I zoom in here, right around this area here. And since then, we have had an earnings reaction from Toast ( NYSE: TOST ), and a longer base of consolidation.
I actually think that this chart looks better now than it did three weeks ago when I talked about it before because it has a longer drawn-out consolidation. I love long drawn-out consolidations and long bases of consolidation. They tend to act like a better launch pad for stocks.
Even just looking at this chart here, going back to this section here, this is a weekly chart by the way, look at how long this went sideways. A downward sloping trendline, sideways consolidation, 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11 weeks of consolidation. And then a strong move through, coming on volume.
His is back in early 2023, but once it was able to break out of this weekly chart, from the low it was able to move up 45 percent before it ended up pulling back, seemingly due to earnings. And so back to now, I actually like the fact that this has a longer base of consolidation.
Because if it does break out it has a higher probability for a nice impulse move to the upside, which can actually give you some pretty decent gains. What I want to see from Toast ( NYSE: TOST ) is a move out of this downward-sloping trendline, coming on volume.
So I would have an alert on Toast ( NYSE: TOST ) right around 24.60, maybe just around $25.00, just to see if this can break out, hold that move, and go to the upside. Now, Toast ( NYSE: TOST ) did announce earnings tonight. It looks like it was a slight beat on revenues, but a move down, a lower earnings per share rating.
As you can see the stock is actually up after hours so the market seems to like what Toast ( NYSE: TOST ) is putting on the table for investors. How’s that for a breakfast meme? What I want to see from Toast ( NYSE: TOST ), is now that we know that the stock is moving up and gapping up after hours.
I definitely want to see it get above and stay above that 24.60 level. It’s right there right now, but if it can do that, and potentially use this downward-sloping trendline as a level of support, I think we could definitely get a move like that to the upside, and squeeze anyone who may be short this stock.
Now as I have said in the past, this has a long drawn-out base of consolidation so it may take some pretty heavy volume to soak up any sellers that may still be left in the stock. But I like the fact that this has been going sideways and in what’s called an institutional due diligence phase.
We just need to break out of that phase, and ideally do it on volume so it can march up higher and potentially test some of the highs from its IPO date back here in 2021. That’s just one setup that I’m looking at for Toast ( NYSE: TOST ) into tomorrow, I want to see it get above this level of resistance right around 24.60, hold above, and do it on volume.
Free Chart