The stock is near a historically bullish trendline
Etsy Inc (NASDQ:ETSY) stock is enjoying a pop today, in anticipation for its fourth-quarter earnings release after the close next Monday, Feb. 25. The security just hit a Feb. 5 record high of $60.58 and has found an area of support at the $54 level. What's more, the stock recently flashed a bullish signal that, if history is any indicator, could send it back up the charts.
The e-tail concern just came within one standard deviation of its 80-day moving average after an extended period above the trendline. This signal has flashed nine times in the past three years, according to data from Schaeffer's Senior Quantitative Analyst Rocky White. ETSY stock averaged a 9.7% gain one month later 75% of the time after these signals. From the equity's current perch at $55.16, a similar move would place it right near its all-time high.
Looking back, the security has averaged a move of 10.6% the day after earnings, regardless of direction, during the past two years. Plus, November's third-quarter earnings yielded an impressive 23.7% jump. This time around, the options market is pricing in a 17.3% next-day move, based on implied earnings deviation data.
As for options trading its business as usual today, with call volume nearly triple the number of puts exchanged. While the March 55 call is seeing the most activity, the 75 strike from the same series is close behind, with data showing new positions being opened at the latter.