October Could Bring Upside to Struggling Etsy Stock

The stock could clear several layers of resistance, if history is any indicator

Digital Content Manager
Sep 28, 2022 at 12:35 PM
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Etsy Inc (NASDAQ:ETSY) is getting a much-needed broad-market boost today, last seen up 3.3% as it struggles to take back the $100 mark. The security was on its way up this July, though August and September have proved rocky as pressure emerges at the 170-day moving average and near the $110 level. October looks promising, though, as ETSY finds its footing on several layers of support including he $94 mark and a historically bullish trendline that could signal more upside soon. 

The trendline we're referring to is the stock's 100-day moving average. According to a study from Schaeffer's Senior Quantitative Analyst Rocky White, there have been five similar instances within the past three years in which ETSY has come within one standard deviation of this trendline following a lengthy trip above it. A month after these five signals, the shares were higher 80% of the time, averaging an impressive 11.1% return. From its current perch, a similar move would put the equity at $11.32, toppling several resistance areas we mentioned above. 

etsy sept 28

Analysts have taken a split stance on the security, with 11 saying "buy" or better, and 10 at a "hold." Meanwhile, short sellers have been dropping off, falling 12.7% in the last two reporting periods, though the 12.54 million shares still make up 10.4% of the stock's available float. 

Options traders, meanwhile, have been quite bearish. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), ETSY sports a 10-day put/call volume ratio of 1.71 that sits higher than 75% of readings from the last year. 

Further, the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.84 stands in the 95th percentile of its annual range. This implies short-term options players have rarely been more put-biased. 


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