E-Tail Stock Has Room to Run This Holiday Season

ETSY has broken out of a cup-and-handle pattern on the charts

CMT, Senior Market Strategist
Nov 8, 2022 at 8:00 AM
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Below is an excerpt from this yesterday's episode of Schaeffer's Playbook of the Week, featuring Schaeffer's Senior Market Strategist Matthew Timpane. Below, Matthew makes a bullish case for Etsy Inc (NASDAQ:ETSY).

"I’m still a little cautious here, because we’ve had such a huge run in the markets. But we have to lean on the side of  the bulls still, even though the pace is hot and heavy. ETSY is breaking out of a downtrend and a cup and handle type of position, per the chart. We are also breaking above the 200-day moving average and the -50% level.


The stock has also cleared $115, which is the site of a large put open interest buildup. 
You can also see a confluence of moving averages going up and to the right. If we did get a big pullback this week, the $100 level should be your support level.

Nine analysts still maintain "hold" ratings, so there could be a shift there. Shorts are covering Etsy heading into holiday season, but short interest is 9.8% of the stock's float and coming off a three-year peak.

Options traders favor puts. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity sports a 50-day put/call volume ratio of 1.71 that ranks in the 85th percentile of its annual range.

The stock is seeing attractively priced premiums at the moment, per ETSY's Schaeffer's Volatility Index (SVI) that sits in the 28th percentile of its annual range. Furthermore, the stock's Schaeffer's Volatility Scorecard (SVS) sits at a high 83 out of 100."

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Schaeffer's Playbook of the Week



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